EUROPEAN FRANCHISE REPORT - .:: EFF 2012 EFF FRANCHISE REP… · EUROPEAN FRANCHISE REPORT ......

EUROPEAN FRANCHISE REPORT

Published by the European Franchise Federation - EFF - 2012

Table of ContentsPart I Franchising - what it is, how it contributes

to the growth of the economy

1. Franchising: description 2

2. Franchising: factors of success 3

2.1 Adynamic&balanceddivisionoftasksbetweenfranchisorandfranchisee

2.2 Recruitmentpolicy:arigorousselectionofmotivatedfranchisees 2.3 Professionalism,internaltraining,learningtobeentrepreneurs 2.4 Benchmarkingandpromotingbestpractice,betterperformance 2.5 Thefranchisor'ssupportsystem 2.6 Astrongvaluesystemsharedbyallinthenetwork

3. Franchising: a vector for economic growth 6

3.1 Franchisingpromotesthecreationofenterprises 3.2 Franchisingpromotesthecreationofemployment 3.3 Franchisinggeneratesturnover 3.4 Franchisingcontributestoamiddle-leveleconomicplatform 3.5. Franchisingpreservesandtransformstraditionalindependenttrades 3.6 Franchisingpromotesthelearningandspiritofentrepreneurship 3.7 Franchisingisaformidablevectorforcross-bordertradeandexport 3.8 Thetransferoffranchisingknow-howasameans

of"technologytransfer"indevelopingmarkets

Part II 21 Country Reports 12

Part III Statistical insight into the economic share of franchising (tables) 56

List of members of the European Franchise Federation

EFF • 1

Part I Franchising: what it is, how it contributes to the growth of the economy

2 • EFF

1. Franchising: description

A franchised business is one that is modelled

• as a structured, replicable commercial system by a founder/conceiver company, "the franchisor"

• which will be contractually sold to independent entrepreneurs, "the franchisees", with the purpose of them growing their business. They are legally, financially and fiscally independent of the franchisor.

• the franchise network is made up of the franchisor and all of the franchisees.

A franchise company may operate several channels of distribution in parallel: franchising (in brick and mortar outlets or mobile vehicles), company-owned outlets, direct selling,etc. E-commerce is developing as a channel that cuts across the others. Its potential needs to be integrated to a company's overall strategy.

This report focuses on franchising only.

To be recognised as a proper franchise, the system must be founded on the following essential and constitutive elements:

• a brand name

• knowhow developed by the franchisor and destined to be transferred to the franchisee as part of the transacted franchise package whose purpose it is to provide him with a business package with which he can start to operate more quickly and with facilities that a stand-alone start-up would not have. The franchisor must continue to develop the knowhow to maintain the brand & system's competitiveness on the market. The knowhow that the franchisor will develop is twofold: that needed for the internal business of the head company, and that which is designed to be transferred to the franchisees.

• the initial and on-going assistance to the franchisees during the term of the contract.

The notion of "system" is sometimes translated in franchise literature as "format", thus a "business format franchising" contract must include at least these 5 essential elements1:

✔ a brand name (registered as a brand name and/or a trademark, etc.) which serves as the umbrella sign for network, and a rallying sign for the consumer and public),

✔ a licence to the use the brand, granted to the franchisee by the franchisor,

✔ a business system – a business concept formatted into a duplicable value “package” founded on the franchisor’s tested knowhow as well as his continued assistance during the term of the agreement,

1 Martin Mendelsohn, “Franchising Law”, Kluwer, 2004.

EFF • 3

✔ payment by the franchisee of a financial consideration, either in a direct form, such as an entrance fee and/or continuing fee (“royalty”), and/or an indirect form such as a mark-up on supplied goods,

✔ the investment in, and ownership of, the assets of the franchised business by the franchisee.

The franchise contract is between 2 independent entrepreneurs. This is a B-to-B relationship.

For Competition law, the franchise agreement is founded on a vertical relationship between the parties, since each operates at a different level of production or distribution, seller and buyer respectively. Distribution or Service agreements may contain "restrictive clauses"2 (to competition) such as territorial exclusivities or other non-compete clauses. The conditions laid on such clauses are different according to whether the contractual agreement is vertical (ie. as between franchisor and franchisee) or horizontal (ie. as in cooperative agreements).

2. Franchising: essential Factors oF success

The success of franchising, generally speaking, comes from the fact that it has developed as a technology for business development by essentially responding to and adapting itself to the ever-evolving needs of a given market and to the consumers who at all times, in all contexts, by virtue of their changing life-styles and consumer awareness, seek choice + a good quality/price ratio + convenience + service. Franchised businesses purport to deliver all of these elements.

2.1 A dynamic & balanced division of tasks between franchisor and franchisee

Role and responsibility of the Franchisor:

As the seller of the franchise, and developer of the network, his tasks are specific. These include:

• to be the overall strategist; to keep the longer-term development in sight and to take the decisions that will keep the brand and its development abreast of competition as well as safeguard its appeal to the end-customer.

• to develop, at the level of the head office, the commercial, technological, staffing and service platform that will efficiently support the network of franchisees during the term of each franchise contract.

2 Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices.

4 • EFF

• to develop the interface between head office and each franchisee so as to steer & nourish the personal dynamics of the network. This includes implementing the dialogue structures with the franchisees, implementing internal conciliation or mediation services, and generally building up the spirit and quality of the network.

• for each of the elements above, the franchisor must plan for and provide the level of investment that will be required to realise all of the above, as well as always seek to improve the level of professionalism that will safeguard the standards and appeal of the brand.

Role and responsibility of the Franchisee:

As buyer of the franchise, the task of each franchisee is to loyally operate the business as it is conceived and organised whilst developing sales, engaging customer satisfaction and brand loyalty. Customers are attracted to the franchise brand by virtue of its image, reputation and service. It is the franchisee's responsibility to sustain these expectations. The franchisee must also be a "team player" in the framework of the network. The franchisor will have a system that organises a systematic flow of commercial and financial information upstream from the franchisees to the head office. This data will serve to define performance benchmarks, set new objectives as well as put into place remedial strategies if need be. Each franchisee will contribute to this pooling of information.

The respective roles and responsibilities of franchisor and franchisees in a franchise network are different and specific, each at their level of operation. Their relationship is constructed as a "synergy of collective intelligence"3.

This in itself is a significant factor of success of the "franchise business model".

2.2 Recruitment policy: a rigorous selection of motivated franchisees

Recruitment is key to the success of any business, but in particular to one based on a network of independent entrepreneurs. It is the responsibility of the franchisor to develop a rigorous and coherent recruitment policy. The qualities he will seek in a franchisee, amongst others, are the motivation to invest in and work as an independent entrepreneur in a context of the network he has chosen to invest in, to have a real interest for the sector of business, be customer-orientated, to have a team-player spirit, to be respectful of the franchisor's concept and of all the elements of the business format, to have the motivation to grow and adapt as the market and circumstances call for.

3 Expression coined by the French Franchise Federation (FFF)'s.

EFF • 5

2.3 Professionalism, internal training, learning to be entrepreneurs

Franchising offers the opportunity "to be in business for yourself but not by yourself".

This attracts to franchising people from a broad range of backgrounds of, many of whom have never run a business or who would not consider running one if they were to start from scratch4, alone.

In order for a franchise to be able to meet the expectations of its future franchisees, it needs to be conceived, structured and delivered in a most professional way.

Initial, on-going training and refresher sessions are typical of franchised businesses. They are for the most part internal to the company. They contribute to bettering the skills of those in training, but also to the forging of the "network spirit".

In is in this framework that people with no experience of running a business learn to run one, "for themselves but not by themselves".

Training classes exist not only for the franchisees, but often for the staff of franchisees.

The incidence of employed staff in a franchise who eventually choose to become franchisees themselves is real.

Franchise associations play a significant role in offering introductory courses for would-be franchisors or franchisees, or staff of franchise companies.

This "context of learning" is one of the significant factors of success of the "franchise business model".

2.4 Benchmarking and promoting best practice, better performance

Optimizing the management of a network composed of independent entrepreneurs relies on the head company (franchisor) installing an efficient reporting system (ITC system) that can gather all of the significant economic and financial data of each operation. This data will be treated so as to on the one hand (i) identify problems in any one operation and address them, and on the other hand (ii) compare results so as to set benchmarks with the view of promoting better performance of each operator, and to measure results by.

This rationalisation, benchmarking and defining of targets is one of the success factors of franchising as opposed to the situation of many stand-alone independent entrepreneurs who do not have the elements of direct comparison necessary for a critical assessment.

4 Results of franchise exhibition visits reveal that the profile of would-be franchisees is very diverse.

6 • EFF

2.5 The franchisor's support system

In franchising, as already expressed, the support structure and transfer of knowhow is one of the essential contractual features of a franchise agreement. It must be there during the term of the contract. It justifies the fees (whatever their form) paid by the franchisee.

Support, on an inter-personal level, also comes from the social life of the network.

In times of economic hardship, related to the economy in general or to the life of a particular network, this double support structure helps to buoy up franchised enterprises to an extent that stand alone enterprises do not benefit from. An example in point is Spain currently, whose economy is severely hit by the world financial and economic crisis. A recent article5 states that the "buoyancy factor" of the franchise support structure in general has proved to be helpful to many Spanish franchise systems during this time (See section on Spain, Part II).

2.6 A strong value system shared by all in the network

The relationship between collaborating independent entrepreneurs, franchisor and franchisee, who share a vision of sustained growth together, must necessarily be founded on the values of mutual recognition, respect and confidence. This is built upon a foundation of transparency, dialogue, loyalty and equity6.

3. Franchising: a vector For economic growth

3.1 Franchising promotes the creation of enterprises

The creation of enterprises occurs as a result of new franchise concepts being created, each with its potential of creating a network of new franchised enterprises. In other words, there is the creation of new franchise brands/concepts, and within each brand, the development of its network of franchised businesses with independent franchisees.

A franchise head company may develop several brands, as well as variations of one brand.

It may also allow its network of franchisees to develop as single-unit franchisees only, or allow a franchisee to have more than one unit (multi-unit franchisees) or allow a franchisee to operate more than one brand (cross franchising). Combinations of the latter two options are also possible.

5 Article by Prudencion Martinez-Franco, Cabinet d’Avocats LELOUP, Sevilla, Spain, 12/7/2012.

6 See EFF publication 2012: The European Code of Ethics for Franchising & its national Extensions & Interpretations.

EFF • 7

Franchises may be imported or home-grown; in retail or in services, or a mix of both.

They exist in all ranges of initial investment level for a unit franchise: from the very expensive (> 20mioE) to the less expensive (around 10,000E).

Franchised businesses operate within the context of the general economy and therefore contribute to the sustaining of enterprises upstream and downstream of their own activity.

To a significant extent, at its grass-roots level, that is at the level of each independent franchised unit, including the separate head company, franchised enterprises essentially fall in the category of Small and Medium-sized enterprises7.

3.2 Franchising promotes the creation of employment

Direct employment:

Employment is created at several levels in a franchised business:

• at the level of the franchisor/head company/subsidiary office(s) with staff(s) of professionals, administration, etc.

Many franchises operate a combination of franchise network as well as company-owned outlets, the latter contributing its share to employment.

• at the level of each franchised unit. The unit can offer, as the case may be, employment to the owner who operates his unit(s) himself, to his family, to his employees.

Indirect employment:

Again, franchised businesses operate within the context of the general economy and therefore contribute to the employment in enterprises upstream and downstream of their own activity.

3.3 Franchising generates turnover

Turnover is generated as a result of what is described in 3.1 & 3.2.

A significant aspect is that the organistion & professionalism that accompanies the development of a franchise network contributes to integrating businesses from the informal sector into the formal & more transparent business sector.

7 SME's: definition of thresholds, European Commission 2003

Enterprise category Headcount Turnover (Euro) Balance sheet total (Euro)

Medium-sized < 250 ≤ € 50 million ≤ € 43 million

Small < 50 ≤ € 10 million ≤ € 10 million

Micro < 10 ≤ € 2 million ≤ € 2 million

8 • EFF

3.4 Franchising contributes to a middle-level economic platform

Franchising, in the "Distributive Trades8" (including Retail) and Services, contributes to the existence of a middle-level platform between the large distribution & service groups and the small stand-alone enterprises, and in doing so, safeguards & develops business competition and diversity.

Globalization has favored the growth of very large distribution groups which operate with vast networks of multiple distribution channels, including large company-owned outlets. At the same time, a lot of small independent traders and businesses have disappeared because of lack of resources and/or knowhow to compete with this competition.

By virtue of the success factors described above, a tested franchised business system offers small independent business owners the opportunity to exist i& develop n the face of such competition by virtue of being in the a network context with its support system. Thus, franchised businesses offer the adaptability, flexibility and resources to operate in competitive markets.

The relevance of this middel platform spurs global players also adopt franchising as one of their development strategies, thus developing franchised daughter-brands aimed at middle-level and smaller, more targeted markets (niche markets).

Franchising, with its development at SME level, contributes to safeguarding and even enhancing competition as well as promoting market diversity.

3.5. Franchising preserves and transforms traditional independent trades

Many classic, traditional "high-street" independent trades and artisans (hairdress-ers, flower shops, small groceries, laundrettes, stationary/postal services, beau-ty parlours, specialised foods, hotel industry, restaurants, travel agencies,etc.) have already opted for or converted their development strategy to franchising. This strategy contributes to modernising their operations, image and appeal to customers, thereby dynamising a significant SME segment of the economy.

This dynamism is an element which can influence and be transposed to countries where commerce and traditional trades are still largely prevalent, thus modernising and giving a "global-identity" flavour to local trade and services (see 3.8).

8 Eurostat: 2011, Key Figures on European Business with a special feature on SMEs.

EFF • 9

3.6 Franchising promotes the learning and spirit of entrepreneurship

The "context of learning/training" described in section 2.3 promotes entrepre-neurship.

It can turn a non-entrepreneur into an entrepreneur. It enhances professionalism.

It can help give other family members, acquaintances, employees, etc. the idea and confidence to become entrepreneurs too, franchising being an option.

Entrepreneurial training is key to develop the desire and confidence to become an entrepreneur. Franchise companies factor this dimension into their franchise package.

3.7 Franchising is a formidable vector for cross-border trade and export

Franchising is a formidable vector for export and cross-border trade.

The replicable factor of franchising makes this business strategy particularly suited to territorial expansion, either within in national borders or cross-border as well as international. The international import/export of successful franchise brands finds its source in a world where consumer tastes and living habits are now "global" in reference, sustained by demographics and new spending power in emerging markets.

To increase the chances of success in expansion and export, it is vital for a franchise system to be first piloted by the head company (or by means of another suitable & balanced arrangement between independent partners) in the relevant target market in order to test the adaptability of the system to the market.

3.8 The transfer of franchising knowhow as a means of "technology transfer" to developing markets

The transfer of franchising knowhow that accompanies the export of franchises (by means of subsidiaries, joint-ventures, area development agreements, master franchising, direct franchising) contributes to modernizing and rationalizing segments of the economy, raiseing the level of local management, of labor efficiency & of levels of compensation. It also inspires local investors to create domestic brands which is why national franchise growth is now such a thriving segment of the economy in developing markets (see Table 1.B).

10 • EFF

EFF • 11

Part II 21 Country Reports

12 • EFF

Franchise marKet inFormation:Franchising started in Austria in 1937 with a national brand by the name of PALMERS (lingerie), still very successful at home and abroad.

In blue: cross-referenced in tables below 2007 2008 2009 2010 2011

Number of distinct franchise brands 400 420

Number of franchised points of sale/business (not company-owned) 7.200 8.000

Employment in the above points of sale/business (including self-employed) (estimated) 64.000 61.000

Turnover for the above points of sale/business (in bn Euros) 7,4 7,9

Proportion of domestic brands (in %) 43,5% 46%

Average annual growth of franchise brands: 2008-2010: 2,5% Average annual growth of points of sale: 2008-2010: 5,6%Average annual growth of employment: 2008-2010: -2,3%Average annual growth of turnover: 2008-2010: 3,4%

Franchise sectors: according to the NACE Rev. 2 classification system. List the first 5 franchise sectors from largest in numbers of franchise systems to smallest.

Section ID Division # NACE Rev. 2 categories Association classification

G 47 Retail trade except motor vehicles & motor cycles 47.7 Fashion

I 56 Food & Beverage service activities

N 82 Office & business support activities

P 85 Education 85.1-5 Other than institutional

NACE Rev. 2

# franchise brands/systems # franchised POS/outlets # employees in Total Turnover in POS (bn €)

2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47 180

I 56 170

N 82 45

P 85 25

TOTAL 420 8.000 61.000 7,9

MeMber of:

austrian Franchise associationÖsterreichischer Franchise-verBand (ÖFv)

www.franchise.at

austria is an eu member state since January 1, 1995.

currency: euro (E)

austria - Franchise review

EFF • 13

Where do domestic brands expand to (list 5 countries from most to least) ?Germany (60%), CEE countries, Italy, Switzerland.

Where do foreign brands come from (list 5 countries from most to least) : Germany, USA, Italy, UK, France.

Vienna

GERMANY

CZECH REPUBLIC

SLOVA.

HUNGARY

SLOVENIA CROATIAITALY

SWITZER.

LICHTEN.

0 50 100 km

AUSTRIA

Modes of entry of foreign franchises: (listed by order of preference from the following modes: direct franchising, subsidiary, area development, master franchising, joint venture)

1. direct franchising, 2. subsidiary, 3. master franchising, 4. area development, 5. joint venture.

Austrian Brands (5, by order of number of franchised outlets):

Allianz, Raiffeisen-Unser Lagerhaus, OMV VIVA, PALMERS

Self-Regulation: ÖFV members commit to respecting the European Code of Ethics for Franchising.

EU Legislation of relevance to Franchise contracts: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices.

association inFormation (ÖFv)Not-for-profit organization created in 1986 in Vienna. Main category of membership: franchise and master franchise companies.

Number of members in 2012: 130 (80% franchisors)

Sources of association income: membership fees (48%), exhibition/conferences (34%), Sponsoring (10%), marketing activities (7%)

Composition of the Board of Directors: representatives of the head franchise companyChairman: Mr. Andreas SCHWERLA, McDonald´s AustriaGeneral Manager: Mrs. Susanne SEIFERT

ÖFV assets: Well-established support programs for start-ups, including franchising, by Chambers of Commerce, Austrian Wirtschafts Service; some banks are familiar & supportive of franchised businesses, particularly Raiffeisenlandesbank Niederösterrieich-Wien; government support to the association under specific conditions: "Neugründungs-förderung"; franchise media (Franchise-net, franchise portal, Franchise Erfolge), Vienna Franchise-Exhibition.

14 • EFF

Franchise marKet inFormation:Franchising was introduced in Belgium in 1930 with a national food-market brand, NOPRI.

In blue: referenced in the tables below 2007 2008 2009 2010 2011

Number of distinct franchise brands 100 200 320 360 350


Employment in the above points of sale/business (including self-employed) (estimated) 40.000 80.000

Turnover for the above points of sale/business (in bn Euros) 8,0 15,3

Proportion of domestic brands (in %) 60% 60%

Average annual growth of franchise brands: 2009-2011: 4,85% Average annual growth of points of sale: Average annual growth of employment: Average annual growth of turnover:



G 47 Retail trade except for motor vehicles/motorcycles Foods; DIY

I 55/56 Accommodation & Food service activities Fast foods

L 68 Real Estate activities

N 79/82 Administrative & support service activities

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47

I 55/56

L 68

N 79/82

TOTAL 320 360 350 11.000 80.000 15,3

MeMber of:

Belgian Franchise Federation Fédération Belge de la Franchise (FBF)Belgische Franchise Federatie (BFF)

www.fbf-bff.be

Belgium is an eu member state since January 1, 1958.

currency: euro (E)

Belgium - Franchise review

EFF • 15

Where do domestic brands expand to (list 5 countries from most to least) ?France, Luxembourg, Netherlands, China, Morocco.

Where do foreign brands come from (list 5 countries from most to least) : France, Netherlands, USA, UK, Italy.

0 50 100 km

GERMANY

LUXEMBOURG

NETHERLANDSNorth Sea

FRANCEBELGIUM

Brussels


1. direct franchising, 2. master franchising, 3. subsidiary, 4. joint venture.

Belgian (5 first ones): Mister Minit, hubo, Aveve, Café Leffe/Belgian Beer Cafe, Leonidas Self-Regulation: FBF-BFF members commit to respecting the European Code of Ethics for Franchising; internal literature refers to "authentic and ethical franchising".

National Legislation: Law on Pre-contractual disclosure for commercial partnership agreements (which includes franchising), 19 December 2005; each year the Federal Parliament receives two evaluation reports assessing the proper implementation of the law, one by the government and one by an Arbitration Committee composed equally of franchise representatives, franchisors and franchisees; the FBF-BFF is represented at the Arbitration Committee which puts the FBF-BFF at the forefront of the defense of the interests of franchising in Belgium.


association inFormation (FBF-BFF)Not-for-profit organization founded in 1992 in Brussels. Main categories of membership: franchisors, junior & starter, associated members (professionals).

Number of franchise system members in 2012: 98 (75% franchisors)Sources of association income: membership fees (75%), franchise exhibition/conferences (4.7%), training/seminars (2.4%), exhibition (4.7%),sale of books (1.5%), sponsorships (12%).

Composition of the Board of Directors: franchisors, master franchises, franchisees (since 2008) Chairman: Mr. Didier DEPREAY, Point Chaud s.aManaging Director: Mr. Gilbert LARDINOIS

FBF-BFF assets: Franchisor & franchisee-led Committee work, accreditation scheme for of all mem-ber categories; website/newsletter, 2 franchise exhibitions (Brussels, Gent); service to members includes a professional insurance for franchisors to specifically protect their franchise activity in general (not the business activity).

16 • EFF

Franchise marKet inFormation:Franchising was introduced in Croatia in 1969 with the American DINERS Credit Card system.

In blue: referenced in the tables below 2007 2008 2009 2010 2011

Number of distinct franchise brands 125 150 168 175

Number of franchised POS/business (not company-owned) 900 900 1000

Employment in the above POS/business (including self-employed) 15.974 16.500 16.000

Turnover for the above POS/business (in bn Euros) 1,8


Average annual growth of franchise brands: 2007-2011: 6,6% Average annual growth of points of sale: 2007-2011: 2,8%Average annual growth of employment: 2007-2011: 0,0% Average annual growth of turnover:



G 47 Retail trade except for motor vehicles & motorcycles

I 55 Accommodation

I 56 Food &beverage service activities

Q 86 Human health & social work activities Fitness

M 70 Management, consultancy, PR

P 85 Education

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47

I 55

I 56

Q 86

M 70

P 85

TOTAL 150 168 175 900 1000 16.500 16.000 7,9

MeMber of:

croatian Franchise associationhrvatska udruga za franšizno poslovanje (Fip)

www.fip.com.hr

croatia is a candidate to the eu.

currency: croatian Kuna (hrK); 1 E ~ hrK 7.5

croatia - Franchise review

EFF • 17

Where do domestic brands expand to (list 5 countries from most to least) ?Bosnia & Herzegovina, Serbia, Slovenia, Hungary, Scandinavia, Poland, USA.

Where do foreign brands come from (list 5 countries from most to least) : Italy, Germany, UK, France, Hungary, USA.

CROATIAZagreb

0 50 100 km

Adriatic Sea

AUSTRIA

SLOVENIAHUNGARY

SERBIA

BOSNIA ANDHERZEGOVINA

MONTEN.

IT.

ITALY Modes of entry of foreign franchises: (listed by order of preference

from the following modes: direct franchising, subsidiary, area development, master franchising, joint venture)

1. direct franchising, 2. joint-venture, 3. area developer, 4.master franchising.

Croatian Brands (by order of number of franchised outlets):

Velpro partner, Diona,Di Caprio, Varteks, AMDS jeans, Surf’ n fries, Chill frozen yogurt, Body Creator, Rejuvenation, Moving Board, San Francisco Coffee house, Mini Cards, Scandal, Centar Energije, GA franšiza, Centar Mihaela, Putovanja za dvoje, ASF franšiza, Bubble Bee smoothie, Total Body coach

Self-Regulation: FIP members commit to respecting the European Code of Ethics for Franchising.

EU Legislation of relevance to Franchise contracts: as a candidate to EU membership, will transpose EU legislation, including REGULATION No 330/2010 on Vertical Agreements.

association inFormation (Fip)Not-for-profit organization created in 2002 in Zagreb, Croatia. Main category of membership: franchise and master franchise companies.Number of members in 2012: 15Sources of association income: membership fees (60%), activities (20%), donations (20%)Composition of the Board of Directors: representatives of the head franchise companyChairman: Dr. Ljiljana KUKEC, founder of Body CreatorSecretary General: Ms. Gordana CORIC

FIP assets: FIP is very actively involved in higher education programs about franchising and in educational/business publications (Franchise Center Osijek, now a franchisee of the Franchise Center of Univ. of El Paso, Texas, USA); FIP teaching at the Faculties of Economics & of Entrepreneurship; franchise portal: www.fransiza.fr; from 2013, government grant program (133.333 €) to create, convert and buy franchised busi-nesses (Ministry of Entrepreneurship & Crafts); Franchise Forum & Exhibition.

18 • EFF

Franchise marKet inFormation:Franchising was introduced in the Czech Republic in 1990 with a national brand, HUDY SPORT.




Employment in the above points of sale/business (including self-employed) 30.000

Turnover for the above points of sale/business (in Euros)





I 56 Food & beverage service activities Gastronomy

L 68 Real estate activities

N 79 Travel agency, tourism services

S 96 Other personal service activities Beauty, fitness

G 47 Retail trade except motor vehicles & motorcycles Fashion, cosmetics, health, DIY

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

I 56

L 68

N 79

S 96

G 47

TOTAL 137 150 168 3.476 4.366 30.000

Where do domestic brands expand to (list 5 countries from most to least) ?

MeMber of:

cZech Franchise association ceská asociace franchisingu (caF)

www.czech-franchise.cz

the czech republic is an eu member state since may 1, 2004.

currency: czech crown (cZK); 1 E ~ 24,9 cZK

cZech repuBlic - Franchise review

EFF • 19

Slovakia, Austria, Germany, France, Poland.

Where do foreign brands come from (list 5 countries from most to least) : USA, Germany, France, Great Britain, Spain, Poland, Hungary and other.CZECH-REPUBLIC

Prague

GERMANY

POLAND

SLOVAKIAAUSTRIA

0 50 100 km


No data available.

Czech Brands (5, by order of number of franchised outlets):

Švejk Restaurant U Karla, eXpreska, Svet zdravi, RK Evropa, CrossCafe

Self-Regulation: CAF members commit to respecting the European Code of Ethics for Franchising.


association inFormation (caF)Not-for-profit organization created in 1993 in Prague. Main category of membership: franchise and master franchise companies.

Number of members in 2012: 37 (67,5 % franchisors)

Sources of association income: membership fees (73%), fair/conferences (22%), marketing activities (5%)

Composition of the Board of Directors: franchisors, professionalsChairman: Mr. Ivo LAMICH, McDonald´s Czech RepublicGeneral Manager: Mrs. Petra RITSCHELOVA

CAF assets: Focus building CAF to be the one-stop single reference for "Franchising Quality" in the Czech Rep.; annual franchise exhibition in Brnö; franchise media: Vlastni firma Franchising, web sites: www.podnikani-start.cz, www.franchisinginfo.cz.

20 • EFF

MeMber of:

Franchise marKet inFormation:Franchising was introduced in Denmark in 1984 by an American brand, ChemDry.


Number of distinct franchise brands 180 185 188

Number of franchised points of sale/business (not company-owned) 7.500

Employment in the above points of sale/business (including self-employed) (estimated) 32.800

Turnover for the above points of sale/business (in bn Euros)

Proportion of domestic brands (in %) 82%




G 47 Retail trade except motor vehicles & motorcycles Fashion, decoration

I 56 Food & beverage service activities Restaurants

P 85 Education

R 93 Sport & amusement act. (fitness, etc.)

S 96 Other personal service activities

N 81 Services to buildings, landscape etc. Property services

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47

I 56

P 85

R 93

S 96

N 81

TOTAL 188 4.000 32.800

Franchise & chains denmarKdanske Kæder

www.dk-franchise.dk

denmark is an eu member state since January 1, 1973.

currency: danish Krone (dKK); 1 E ~ 7.4 dKK.

denmarK - Franchise review

EFF • 21

Where do domestic brands expand to (list 5 countries from most to least) ?Scandinavia, EU, China.

Where do foreign brands come from (list 5 countries from most to least) : USA, Norway, France, Sweden.

Copenhagen

DENMARK

SWEDEN

GERMANY

0 50 100 km

0 50 100 kmNorthSea


1. subsidiary, 2. master franchising, 3. direct franchising, 4. area development, 5. joint venture.

Danish Brands (5, by order of number of franchised outlets):

IC Companys, Noa Noa, ecco, Bianco Footwear, JYSK, BoConcept

Self-Regulation: FFA members commit to respecting the European Code of Ethics for Franchising.The association recommends to its members to refer to the Swedish Franchise Disclosure Law (2006).


association inFormation (dK/dFa)Not-for-profit organization founded in 1984 in Copenhagen.

Main categories of membership: franchisors, master franchises, franchisees, professionals.

Number of members in 2012: 135 (41 franchisors & 42 franchisees)

Sources of association income: membership fees (93%), fair/conferences (3%), training courses (2%), marketing (2%)

Composition of the Board of Directors: franchisors, franchisee representationChairman: Mr. Viggo MøLHOLM, Chairman BoConcept Managing Director: Mr. Toke ALLENTOFT

DK's assets: is negotiating to get a government growth fund for start-ups to include franchise start-ups.

22 • EFF

Franchise marKet inFormation:Franchising started in Finland in 1970, with a national brand by the name of Seppälä.

In blue: croos-referenced in tables below 2007 2008 2009 2010 2011


Number of franchised points of sale/business (not company-owned) 3.500 4.200 4.400 4.500 4.500

Employment in the above points of sale/business (including self-employed) (estimated) 35.700 43.000 45000 46.000 46.000

Turnover for the above points of sale/business (in bn Euros) 43,0 50,0 50,0 51,0 54,5

Proportion of domestic brands (in %) 75% 74% 74% 74% 74%

Average annual growth of franchise brands: 2007-2011: 5,4% Average annual growth of points of sale: 2007-2011: 6,8%Average annual growth of employment: 2007-2011: 6,8% Average annual growth of turnover: 2007-2011: 6,3%



G 47 Retail trade except motor vehicles & motorcycles Retail (36%)

I 56 Food & beverage service activities Fast food, rest., cafés (16%)

I 56 Services to buildings, landscaping etc.

Services (48%) I 56 Sport, fitness, recreational activities

N 82 Real estate activities

P 85 Human health activities/social work

X Other (unspecified)

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47 82

I 56 28

I 56 17

I 56 10

N 82 8

P 85 7

X 118

TOTAL 270 4.500 46.000 54,5

Finnish Franchising association (FFa)suomen Franchising-Yhdistys ry (sFY)www.franchising.fi

Finland is an eu member state since January 1, 1995.

currency: euro (E)

Finland - Franchise review

MeMber of:

EFF • 23


1. master franchising, 2. area development, 3. direct franchising, 4. subsidiary, 5. joint Venture.

Finnish Brands (5, by order of number of franchised outlets):

Kotipizza, R-kioski, Laatutakuu, Kiinteistömaailma

Self-Regulation: FFA members commit to respect the European Code of Ethics for Franchising.


association inFormation (sFY/FFa)Not-for-profit organization founded in 1988 in Helsinki. Main category of membership: franchise and master franchise companies.

Number of franchise system members in 2012: 122 (72% = franchise systems)

Sources of association income 2011: membership fees (83%), Franny Awards Gala (5%), publications (10%), other (2%)

Composition of the Board of Directors: franchisors:Chairman: Mr. Henri HÄYRINEN, CEO of Suomen Laatutakuu Palvelut Oy

(facility services)CEO: Mr. Juha VASTAMÄKI

FFA assets: Association membership covers significant portion of franchise systems in Finland; annual Franchise Report ('Franchising Suomessa 2012'); Franchise Business College (http://www.fbc.fi).

Where do domestic brands expand to (list 5 countries from most to least) ?Sweden, Russia, Estonia, Denmark, Norway.

Where do foreign brands come from (list 5 countries from most to least) : Sweden, Denmark, Norway, US, UK.

FINLAND

SWEDEN0 50 100 km

Gulf ofBothnia

Baltic Sea

Barents Sea

Helsinki

RUSSIA

NORWAY

ESTONIA

24 • EFF

MeMber of:

Franchise marKet inFormation:Franchising was introduced in France in 1929 with the French brands PIGIER and Pingouin®.


Number of distinct franchise brands 1.137 1.229 1.396 1.477 1.569


Employment in the above points of sale/business (including self-employed) (estimated) 315.715 330.991 327.773


Proportion of domestic brands (in %) 85% 85,2%

Average annual growth of franchise brands: 2007-2011: 8,5% Average annual growth of points of sale: 2007-2011: 7,1%Average annual growth of employment: 2007-2009: 1,9% despite neg. growth in 2009 Average annual growth of turnover: 2007-2011: 5,2%



G 45 Repair motor vehicles & motorcycles Sale motor accessories

G 47 Retail except motor vehicles/cycles Personal/household goods

I 55 Accommodation Hotels

I 56 Food & beverage services Food

S 95 Repair of computers & personal & household goods

S 96 Other personal service activities Personal services , beauty

N 79 Travel agency/tour operator reservation services etc.

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 45

G 47

I 55

I 56

S 95

S 96

N 79

TOTAL 1.396 1.477 1.569 53.101 58.351 62.041 327.773 47,7 47,9 49,2

French Franchise Federation (FFF)Fédération française de la Franchise (FFF)www.franchise-fff.com

France is an eu member state since January 1, 1958.

currency: euro (E)

France - Franchise review

EFF • 25

Where do domestic brands expand to (list 5 countries from most to least) ?305 French brands export everywhere and in particular to Europe, North Africa & the Middle East.

Where do foreign brands come from (list 5 countries from most to least) : USA, Italy, Spain, UK, Canada.

FRANCE

Paris

0 200 km100

SPAIN

BELGIUMGERMANY

AUSTRIA

ITALY

SWITZERLAND

NETHER.

LUX.

GREAT-BRITAIN


1. master franchising, 2. subsidiary which develops the franchise network, 3. joint venture.

French Brands (5 first ones): VIVAL (food), Guy Hoquet (real estate), Gamm vert (garden products), YVES ROCHER (Beauty products), ALAIN AFFLELOU (eye ware).

Self-Regulation: FFF members commit to respecting the European Code of Ethics for Franchising as well as to the FFF's national extensions to this Code.National Legislation: Law + Decree on Pre-contractual disclosure (applicable to franchising): Code of Commerce, article L 330-3 which replaces the Loi Doubin of 31 December 1989, article 1, referred to as the "Loi Doubin"; Decree n° 91-337 of April 4 1991.EU Legislation of relevance to Franchise contracts: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices.

association inFormation (FFF)Not-for-profit organization founded in 1971, in Paris.Main categories of membership: franchisors, master franchises, professionals.Number of franchise system members in 2012: 160 (78% franchisors)

Sources of association income: membership fees (50%), fair/conferences (40%), training (10%)

Composition of the Board of Directors: franchisors, master franchises, represen-tatives of franchisees Chairman: Mr. Rene PREVOST, SpeedyDélégué Generale: Mrs. Chantal ZIMMER

FFF's assets: services to members; multiple conferences, seminars including annual Legal conf.; legal database; 2 FFF-owned franchise exhibitions (Paris & Marseille); 2 franchise award schemes; FFF's Franchise Academy; co-created university masters in franchising; annual scientific research (available on the FFF site); FFF publications: (Newsletter (REZO)), annual Report/Directory ("Toute la Franchise"); publication of books; close cooperation with UBIFRANCE (export); close collaboration with major banks to finance franchises; FFF's Mediation Committee; cooperation with the Arbitration Chamber of Paris (CAP); Commission of Mediation Franchise-Consumers (MFC); annual Franchise Awareness Week; collaboration with the Chambers of Commerce & Industry; collaboration with vibrant franchise media (printed, on-line).

26 • EFF

Franchise marKet inFormation:Franchising was introduced in Germany in 1971 with a national brand OBI and an American brand McDonald's.

In blue: cross-referenced in tables below 2000 2007 2008 2009 2010 2011

Number of distinct franchise brands 735 910 950 980 980 990

Number of franchised points of sale/business (not company-owned) 37.000 55.000 57.000 61.000 65.500 66.900

Employment in the above POS/business (including self-employed) estimated

346.500 441.000 450.000 459.000 463.000 496.000

Turnover for the above POS/business (in bn Euros) 22,0 41,0 47,0 44,0 55,0 64,4

Proportion of domestic brands (in %) 80% 80% 80%

Average annual growth of franchise brands: 2007-2011: 2,2% 2000-2011: 2,9%Average annual growth of POS: 2007-2011: 5,0% 2000-2011: 6,7%Average annual growth of employment: 2007-2011: 7,5% 2000-2011: 3,6%Average annual growth of turnover: 2007-2011: 12,6% 2000-2011: 16,1%


Section ID Div. # NACE Rev. 2 categories Association classification


G 47 Retail trade except motor vehicles/motorcycles

I 55 Accommodation

I 56 Food & beverage service activities

X Other (unspecified) Incl. mainly Services- trades,crafts (ie. N 81 services to buildings & landscapes)

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

S 96 455 (46%)

G 47 317 (32%)

I 55 149 (15%)

I 56

X 69 (7%)

TOTAL 980 980 990 61.000 65.500 66.900 459.000 463.000 496.000 44,0 55,0 64,4

MeMber of:

german Franchise association deutscher Franchise-verband e.v (dFv)

www.franchiseverband.com

germany is an eu member state since January 1, 1958.

currency: euro (E)

germanY - Franchise review

EFF • 27

Where do domestic brands expand to (list 5 countries from most to least) ?Austria, Switzerland, the Netherlands, France, Poland.

Where do foreign brands come from (list 5 countries from most to least) : USA, Austria, Switzerland, the Netherlands, France.

GERMANYBerlin

North Sea

AUSTRIA

0 75 150 km

CZECHREPUBLIC

POL.

SWIT.

FRANCE

NETH.

BalticSea


1. direct franchising, 2. subsidiary, 3. master franchising, 4. area development, 5. joint venture.

German Brands (5 first ones):

OBI, Fressnapf, Engel & Völkers, BackWerk, VAPIANO

Self-Regulation: DFV members commit to respecting the European Code of Ethics for Franchising; DFV-System-Check, a franchise accreditation scheme available to all franchises established in Germany, and mandatory for DFV members.


association inFormation (dFv)Not-for-profit organization founded in 1978, in Munich, now established in Berlin. Main categories of membership: franchisors, master franchises, professionals.

Number of members in 2012: 273 (franchisors, master franchises, professionals)Sources of association income: membership fees (100%)

Composition of the Board of Directors: franchisors & master franchisees Chairman: Dr. h.c. Dieter FRÖHLICH, Musikschule Fröhlich Managing Director: Mr. Torben L. BRODERSEN

DFV's assets: Accreditation: DFV-System-Check; education: Deutsches Franchise-Institut GmbH (DFI), rich website with different tools for users (e.g. System locator), franchise award scheme, annual Franchise Forum (conference), cooperation with Center for Franchising & Cooperation of the University of Munster; higher education: CCI training for Franchise-Manager, WKS School for Business (franchise business program), publications: DFV-Newsletter, Franchise-Ratgeber (annual Guidebook), Franchise-Despesche (political dispatch); Verzeichnis der Franchise-Wirtschaft (catalogue), Franchise-Erfolge (magazine); portals: franchiseportal.de, franchise-net.de; annual franchise exhibition: Start Messe; DFV-based Legal database (laws and case law); Franchise Law Newsletter; Bank support in the form of public guarantees for franchise start-ups: Bürgschaftsbanken, KfW Mittelstandsbank; Deutsche Bank, Sparkassen appreciate franchise clients that abide by the DFV-System-Check.

28 • EFF

MeMber of:

Franchise marKet inFormation:Franchising started in Greece in 1980 with a national brand by the name of neoset group.


Number of distinct franchise brands 563 450 456


Employment in the above points of sale/business (including self-employed) (estimated)


Proportion of domestic brands (in %) 69,8%

Average annual growth of franchise brands: 2009-2011: -9,4% Average annual growth of points of sale: 2007-2011: -1,2%Average annual growth of employment: Average annual growth of turnover:



G 47 Retail trade except for motor vehicles and motorcycles Clothing (29%), misc.(15%)

I 56 Food and beverage service activities Food & restaurants (11%)

P 85 Education 10,3%

G 45 retail trade, repair of motor vehicles and motorcycles

Especially Services: 34,7%

L 68 Real estate activities

M 69, 70, 74 Professional scientific and technical activities

Q 86 Human health activities

S 94 Activities of membership organisations

S 96 Other personal services activities

NACE Rev. 2 # franchise

brands/systems # franchised POS/outlets # employees in Total Turnover in POS (bn €)

2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47 288 241 233 5898 5845 5174

I 56 93 63 75 2691 2656 2599

P85 52 48 43 1980 2065 1929

G45,L68, M 85 62 68 1087 1087 1019

Q86, S94, S96 45 36 37 392 431 392

TOTAL 563 450 456 12.048 12.084 11.113

greeK Franchise association (gFa)hellas Franchise

www.franchising.gr

greece is an eu member state since January 1, 1981.

currency: euro (E)

greece - Franchise review

EFF • 29

Where do domestic brands expand to (list 5 countries from most to least) ?15 national brands to Eastern Europe, Balkans, Cyprus, Middle East, Russia, Turkey, Germany.

Where do foreign brands come from (list 5 countries from most to least) : Italy, US, Germany, France.

GREECE

AthensAegean

Sea

TURKEY

TURKEY

BULGARIAMACEDONIA

ALBANIA

0 50 100 km

Mediterrane an Sea

IonianSea


1. master franchising, 2. area development, 3. subsidiary, 4. direct franchising, 5. joint venture.

Greek Brands (5 first ones):

AXON, Gregory's, EVROGNOSI

Self-Regulation: GFA members commit to respect the European Code of Ethics for Franchising).


association inFormation (gFa)Not-for-profit organization founded in 1996 in Athens.

Main categories of membership: franchisors, master franchises, professionals

Number of franchise system members in 2012: 75 (60% franchise systems)

Sources of association income 2011: membership fees (80%), fair & conferences (20%)

Composition of the Board of Directors: franchisors, professionalsChairman: Mr. Petros PETRIDIS, AXON Language School Managing Director: Mr. Sotiris YANAKAKIS

GFA assets: Lobbing with the government and other business associations; collaboration with other franchise associations and chambers of commerce worldwide; providing mediation services to all franchisors ,members of the GFA or not; newsletters; conferences; endorse the annual franchise exhibition organized by KEM S.A in Athens; diverse franchise media.

30 • EFF

Franchise marKet inFormation:Franchising was introduced in Hungary in 1987 with the American brand McDonald’s.



Number of franchised points of sale/business outlets 17.000 18.000 19.000 20.000 20.000

Employment in the above POS/business outlets (including self-employed) 92.000 100.000 100.000 100.000 100.000



Average annual growth of franchise brands: 2007-2011: 2,3% Average annual growth of points of sale: 2007-2011: 4,2%Average annual growth of employment: 2007-2011: 2,2% Average annual growth of turnover:



I 56 Food & beverage service activities Fast food

G 47 Retail trade except motor vehicles & motorcycles Clothing, fashion


Q 86 Human health activities Fitness, beauty

H 52 Warehousing & support activities for transportation

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

I 56 180

G 47 170

S 96 45

Q 86

H 52 25

TOTAL 350 361 361 19.000 20.000 20.000 100.000 100.000 100.000

MeMber of:

hungarian Franchise associationmagyar franchise szövetség (mFsZ)

www.franchise.hu

hungary is an eu member state since may 1, 2004. currency: Forint; 1 E ~ 283 huF

hungarY - Franchise review

EFF • 31

Where do domestic brands expand to (list 5 countries from most to least) ?Romania, Poland, Slovakia, Croatia, Czech Republic.

Where do foreign brands come from (list 5 countries from most to least) : USA, Germany, Spain, France, Italy.

HUNGARY

AUSTRIA

SLOVAKIA UKRAINE

ROMANIA

YUGOSLAVIACROATIA

Budapest

0 50 100 km


1. direct franchising, 2. master franchising, 3. joint-venture, 4. subsidiary.

Hungarian Brands (by order of number of franchised outlets):

FORNETTI, DIEGO, MOL, CO-OP, T-COM

Self-Regulation: HFA members commit to respecting the European Code of Ethics for Franchising as well as the HFA's Pre-contractual Disclosure requirements.

EU Legislation of relevance to Franchise contracts: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices; national competition laws for specific industries.

association inFormation (mFsZ)Not-for-profit organization created in 1991 in Budapest, Hungary. Main category of membership: franchise companies, both franchisor and franchisee companies (1 franchisee company in 2012).

Number of members in 2012: 50 (70% franchise systems)Sources of association income: membership fees (85%), conferences/seminars ; (10%), publications (5%)

Composition of the Board of Directors: franchisors only

Chairman Mr. László MURÁNYI, COOP Hungary Zrt

CEO Dr. Katalin MANDEL

MFSZ assets: The Hungarian government adopted in 2011 its New Széchenyi Plan and Growth & Stability Program aimed at growing the economy. Franchise networks that abide by the European Code of Ethics are eligible to tender for EU/government financial support programs. MFSZ: focused on government lobbying, communication: website, social media, publications, etc.

32 • EFF

Franchise marKet inFormation:Franchising was started in Italy in 1970, with the Italian brand GAMMA d.i.



Number of franchised POS/business outlets 52.725 53.434 53.313 54.013 54.096

Employment in the above POS/business outlets (including self-employed) (estimated) 182.908 182.215 180.525 186.409 188.222


18,2 21,4 21,8 22,2 22,3

Proportion of domestic brands (in %) 90% 90% 90% 89,5% 85%




I 56 food & beverage services Food distribution:26%

N 79 Travel agency/tour operator reservation services etc. 9%

L 68 Real Estate services 6%

K 64 Financial service activities (credit)

S Services Spec. prod/health/legal: 9%

G 47 Retail trade except motor vehicles & motorcycles Clothing, fashion: 7%

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

I 56

N 79

L 68

K 64

S

G 47

TOTAL 869 883 885 53.313 54.013 54.096 180.525 186.409 188.222 21,8 22,2 22,3

italian Franchise association associazione italiana del Franchising (aiF)www.assofranchising.it

italy is an eu member state since January 1, 1958.

currency: euro (E)

italY - Franchise review

MeMber of:

EFF • 33


1. master franchising, 2. direct franchising.

Italian Brands (5 , by order of number of franchised outlets):

Tecnocasa, Domotecnica, Calzedonia, Punto 187, Segafredo, Intimissimi, Mail Boxes Etc (MBE)Self-Regulation: AIF members commit to respecting the European Code of Ethics for Franchising as well as to an AIF Code of Ethics wich makes reference to the Franchise law (see below).

National Legislation: Law + Decree on Pre-contractual disclosure for networks of commercial affiliated partners (which includes franchising): Legge 6 maggio 2004 no. 129 : Norme per la disciplina dell’affiliazione commercial; Decreto 2 settembre 2005, N° 204; Regolamento Recante Norme per la Disciplina Dell’Affiliazione commerciale du cui all’articolo 4,comma 2, della legge 6 maggio 2004, N° 129.


association inFormation (aiF)Not-for-profit organization founded in 1971in Milano.Main categories of membership: franchisors, master franchises, professionals.Number of franchise system members in 2012: 213 (70% franchise systems)Sources of association income: membership fees (70%), fair/conferences/marketing (29%), training (1%-free for members)Composition of the Board of Directors: franchisors, master franchises Chairman: Mr. Graziano FIORELLI, Mail Boxes Etc. (MBE)Secretary General: Mr. Italo BUSSOLI

AIF assets: AIF's assets: own on-line franchise exhibition (www.webfranchisingexpo.it); long-term annual franchise surveys; many services to members; annual conferences; Financing of franchises: AIF Blue Stamp accreditation system for members in relation with BNL-BNP Paribas; colla-boration with UBI Banca-Centrobanca; access to regional financing; Franchising Yearbook; recruitment Road Show; Franchise press: www.azfranchising.it; www.infofranchising.it; www.betheboss.it; www.annuariodelfranchising.it; www.cliccafranchising.it; Government- support program for unemployed who wish to become franchisees: INVITALIA.

Where do domestic brands expand to (list 5 countries from most to least) ?Spain, France, Germany, UK, USA.

Where do foreign brands come from (list 5 countries from most to least) : USA, France, Spain.Adriatic Sea

Tyrrhenian Sea

0 50 100 km

ITALY

Roma

FRANCE

BOSNIAAND

HERZEGOVIA

HUNGARY

CROATIA

SICILIA

SLOVENIA

AUSTRIASWITZERLAND

SAN MAR.

LICHT.

SARDEGNA

ALGERIA TUNISIA MALTA

Mediterrane an Sea

34 • EFF

Franchise marKet inFormation:Franchising started in the Netherlands in 1948 with a Dutch book-store brand, bruna.



Number of franchised points of sale/business (not company-owned) 15.200 28.219 28.466 29.021 29.509 29.781

Employment in the above POS/business (including self-employed) 150.500 245.576 255.201 258.808 257.361 270.300

Turnover for the above points of sale/business (in bn Euros) 11,6 29,7 30,3 29,7 30,2 31,3


Average annual growth of franchise brands: 2007-2011: 2,3% 2000-2011: 17,0%Average annual growth of points of sale: 2007-2011: 1,4% 2000-2011: 96,0%Average annual growth of employment: 2007-2011: 2,5% 2000-2011: 80,0%Average annual growth of turnover: 2007-2011: 1,8% 2000-2011: 170,0%


Section ID Div. # NACE Rev. 2 categories Association classification

G 47 Retail trade except mot. veh. & motorcycles Food & non food: 39%

I 55 Accommodation Hospitality: 11,5%

I 56 food & beverage service activities

H,J,K,L,M Services Business services: 41%

P,Q, R,S Services Education, health, fitness, senior care: 8,5%

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47 280 277 287 16.302 16.068 15.997 178.262 171.809 182.800 22.118 22.367 23.110

I 55,56 82 86 85 2.137 2.160 2.305 32.800 34.534 34.700 1.470 1.663 1.770

H,J,K,L,M, P,Q,R,S - Services

270 286 304 8.130 8.736 8.888 35.045 37.576 37.500 3.849 3.833 4.007

Other 60 65 63 2.452 2.545 2.591 12.700 13.443 15.300 2.233 2.317 2.368

TOTAL 692 714 739 29.021 29.509 29.781 258.808 257.362 270.300 29,6 30,2 31,2

MeMber of:

netherlands Franchise associationnederlandse Franchise vereniging (nFv)

www.nfv.nl

the netherlands is an eu member state since January 1, 1958.

currency: euro (E)

the netherlands - Franchise review

EFF • 35

Where do domestic brands expand to (list 5 countries from most to least) ?Germany, Belgium, France.

Where do foreign brands come from (list 5 countries from most to least) : Germany, Belgium, France, UK and USA.Amsterdam

0 50 km25

BELGIUM

GERMANY

NETHERLANDS

North Sea


1. master franchising, 2. direct franchising, 3. joint Venture, 4. area development, 5. subsidiary.

Dutch Brands (5 first ones):

hunkemöller, PEARLE, HEMA, the alwaysbemobile company, BLOKKER

Self-Regulation: NFV members commit to respect the European Code of Ethics for Franchising.


association inFormation (nFv)Not-for-profit organization founded 1972. Main categories of membership: franchisors, master franchises, professionals.

Number of franchise system members in 2012: 259 (77% franchisors, master franchises)

Sources of association income 2011: membership fees (83%), marketing (6%), sale of NFV publications (5%), other (6%)

Composition of the Board of Directors: franchisors, master franchises, professionals

Chairman: Mr. Will van den HOOGEN

Managing Director: Mr. Jos BURGERS

NFV assets: NFV System Check; every 5 years, re-accreditation check of the franchise agree-ments of the NFV members; NFV pre-contractual disclosure checklist, franchise contract checklist, franchise master classes, in-house publications: franchise book-lets, NFV Bulletin; specialized press: "Franchise +"; annual franchise exhibition: "onderneem't"; Government guarantee schemes for start-up enterprises, including franchising.

36 • EFF

MeMber of:

Franchise marKet inFormation:Franchising started in Poland in 1989, with the French brand YVES ROCHER.



Number of franchised POS/business (not company-owned) 22.450 26.781 32.589 37.218 42.522 47.750

Employment in the above POS/business (including self-employed) (estimated) 157.000 187.500 212.000 259.000 301.000 338.000

Turnover for the above points of sale/ business (in bn Euros) 18,2 20,4 22,7 24,5 25,7 28,1

Proportion of domestic brands (in %) 71% 69% 72% 74% 74% 74%




I 55,56 Accommodation & Food service activities Food & beverage

G 45 Retail/repairs motor vehicles & motorcycles

G 47 Retail trade except motor vehicles & motorcycles

S 96 Other personal services

N 81 Services to buildings & landscapes

N 82 Office/business support services

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

I 55/56 79 90 117 1.678 1.699 1.883 13.745 16.762 20.878 0,65 0,75 0,72

G 45/47 378 456 440 26.852 30.651 33.951 183.074 223.261 260.226 21,56 23,01 24,18

S 96 94 116 144 3.692 4.454 6.103 14.124 17.224 17.930 0,48 0,70 0,69

N 81/82 33 35 45 367 414 585 1.150 1.403 1.976 0,04 0,06 0,08

TOTAL 584 697 746 32.589 37.218 42.522 212.100 258.650 301.000 22,73 24,52 25,67

polish Franchise organisation (pFo)polska organizacja Franczyzodawców (poF)

http://franchise.org.pl

poland is an eu member state since may 1, 2004.

currency: polish Zloty (pln); 1 E ~ 4.19 pln

poland - Franchise review

EFF • 37

Where do domestic brands expand to (list 5 countries from most to least) ?Czech Rep., Slovakia, Lithuania, Ukraine, Russia.(note: 72 Polish brands have developed abroad) Polish Brands operating abroad :INDECO, INGLOT, ATLANTIC, Vacu Fit,RESERVED

Where do foreign brands come from (list 5 countries from most to least) : Italy, Germany, France, USA, Great Britain, Spain.

Warsaw

GERMANY

CZECH-REPUBLICSLOVAKIA

UKR.

BELAR.

POLAND

RUSSIA LITHUANIA

0 100 km50


1. master franchising (49,2%), 2. subsidiary (35,4%), 3. direct franchising (7,9%), 4. area development (5,8%), 5. joint venture (1,6%).

Polish Brands (5, by order of number of franchised outlets):

ABC SKLEPY, LEWIATAN, Nasz Sklep, eLDe, GROSZEK

Self-Regulation: PFO members commit to respecting the European Code of Ethics for Franchising.

EU Legislation of relevance to Franchising: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices.

association inFormation (pFo)Not-for-profit organization created in May 2000 in Warsaw. Main categories of membership: franchise and master franchise companies.

Number of members in 2012: 35 (franchise systems only)Sources of association income: membership fees (95 %), fair/conferences (5%).Composition of the Board of Directors: franchisors, master franchises, 1 professional.Chairman: Mrs. Monika DABROWSKA, McDonald´s, PolandSecretary General: Mr. Michal SKUBISZEWSKI

PFO assets: Poland has not suffered as badly as the rest of the EU from the financial and economic crisis; franchising is developing very well; commercial banks that lend to franchise businesses: FM Bank, Deutsche Bank; specialized franchise press: Wlasny Biznes Franchising; annual Franchise expo (franchiseexpo.pl).

38 • EFF

MeMber of:

Franchise marKet inFormation:In blue: referenced in the tables below 2007 2008 2009 2010 2011



Employment in the above POS /business (including self-employed) (estimated) 66.860 68.960 69.536 73.143 70.151






NACE Rev. 2

Section ID,

Division #


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

TOTAL 524 570 578 13.000 12.016 11.760 69.536 73.143 70.151 5,0 7,8 5,3

portuguese Franchise associationassociação portuguesa da Franchise (apF)

www.apf.org.pt

portugal is an eu member state since January 1, 1986.

currency: euro (E)

portugal - Franchise review

EFF • 39

Where do domestic brands expand to (list 5 countries from most to least) ?Spain, Europe, PALOP (Portuguese speaking African countries), Middle East, Latin America.

Where do foreign brands come from (list 5 countries from most to least) : Spain, USA, France, Italy, UK, Latin America.

SPAIN

PORTUGAL

500 100 km

Lisboa


1. master franchising, 2. direct franchising, 3. area development, 4. subsidiary, 5. license agreements.

Portuguese Brands (5 first ones):

OPTIVISÃO, VALORES, OURINVEST, NÃO+PÊLO, PARFOIS

Self-Regulation: APF members commit to respect the European Code of Ethics for Franchising.

EU Legislation of relevance to Franchising: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices.

association inFormation (apF)Not-for-profit organization founded in March 1988 in Lisbon by international franchisors.

Categories of membership: franchisors, master franchises, professionalsNumber of franchise system members in 2012: 24 (30% franchisors)Sources of association income 2011: membership fees 100%Composition of the Board of Directors: franchisors, master franchises, Chairman: Mr. Mr. Paulo ANTUNES, LDC, S.A.Vice-president and Executive Director: Mrs Cristina Matos, BRODHEIM Grupo, S.A.Vice-president: Mr. Ricardo Sousa, Century21, Lda

AFP assets: Export missions to Spanish and Portuguese speaking markets in the frame of FIAF, the Ibero-American Franchise Federation; focus on the Brazilian market; working with support of BES – Bank Espirito Santo.

40 • EFF

Franchise marKet inFormation:Franchising was introduced in Serbia in 1969 with the US brand, DINERS Credit Card.


Number of distinct franchise brands 106

Number of franchised points of sale/business (not company-owned)

No info. available

Employment in the above POS /business (including self-employed)


Proportion of domestic brands (in %)

Average annual growth of franchise brands: Average annual growth of points of sale: Average annual growth of employment: Average annual growth of turnover:



No info. available

NACE Rev. 2

Section ID,

Division #


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

TOTAL 106

serBian Franchising develop. assoc.srpsko udruženje za razvoj franšizinga

www.franchiseserbia.rs

candidate to the eu.

currency: serbian dinar (rsd); 1 E ~ 112.34 rsd

MeMber of:

serBia - Franchise review

EFF • 41

Where do domestic brands expand to (list 5 countries from most to least) ?Bosnia and Herzegovina, Montenegro, FYRO Macedonia, Romania, Bulgaria.

Where do foreign brands come from (list 5 countries from most to least) : USA, UK, Italy, Germany, Slovenia.

Belgrade

SERBIA

ROMANIA

BULGARIA

MACEDONIAALBANIA

MONTENEGRO

HUNGARY

CROATIA


0 50 100 km

Adriatic Sea


1. direct franchising, 2. master franchising, 3. area development, 4. subsidiary, 5. joint venture.

Serbian Brands:

MINI PANI, RAKIA BAR, ADORE CHOCOLATE ,FLY FLY TRAVEL, KONTIKI, FILIP TRAVEL, Dve Šmizle (City Fashion), LUNA, PS FASHION, Arcus Club Fit&Relax, JP PTT Saobracaj, EXTREME INTIMO, OFFICE 1 SUPERSTORE, MEGALINE.

Self-Regulation: SURF members commit to respecting the European Code of Ethics for Franchising.

National franchise-specific regulation: None

EU Legislation of relevance to Franchising: As a candidate to EU membership, Serbia will transpose EU legislation, including REGULATION No 330/2010 on Vertical Agreements.

association inFormation (surF)Not-for-profit organization created in 2009 in Belgrade, Serbia.Main category of membership: franchise and master franchise companies.Number of members in 2012: 7 (45% of franchise systems in relation to turnover)Sources of association income: membership (85%), exhibition (5%), other services (10%)Composition of the Board of Directors: representatives of the head franchise companyChairman Board of Directors: Mr. Goran KARIC, DELTA SPORTPresident of Executive Board: Mr. Dusan SIKIMIC, DINERSManager: Mrs. Katarina BLAZIC

SURF assets: functions in close collaboration with the Franchise Centre of the Serbian Chamber of Commerce in Belgrade and benefits from strong government support..

42 • EFF

Franchise marKet inFormation:Franchising was introduced in Slovenia in 1988 by the American brand HERTZ, soon followed by domestic brands in retailing.




Employment in the above points of sale/business (including self-employed)

Turnover for the above points of sale/business (in bn euros)


Average annual growth of franchise brands: 2007-2011: 0,75%Average annual growth of points of sale: 2007-2011: 0,89%Average annual growth of employment:Average annual growth of turnover:



G 47 Retail trade except motor vehicles & motorcycles Food, DIY

R 93 Sports/Amusement/Recreation activities Fitness


N 79 Travel agency, tour operator reservation service, etc.

S 96 Other personal services activities

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47

No reliable information.R 93

I 56

N 79

S 96 107 103 106 1.527 1.532 1.540 No information

MeMber of:

slovenian Franchise association (sFa)sekcija za franšizing

www.franchise-slovenia.net

member of the eu since may 1, 2004.

currency: euro (E)

slovenia - Franchise review

EFF • 43

Where do domestic brands expand to (list 5 countries from most to least) ?Croatia, Serbia, Bosnia & Herzegovina, Austria, Italy.

Where do foreign brands come from (list 5 countries from most to least) : Italy, Croatia, Austria, Hungary, France, USA.

0 50 100 km

AdriaticSea

AUSTRIAHUN.

SERBIA


CROATIA

ITALY

SLOVENIA

Ljubljana


No information.

Slovenian Brands (5, by order of number of franchised outlets):

MERCATOR, TUŠ, MITJA Hair Team, SIMPLE, LINEA SNELLA

Self-Regulation: SFA members commit to respecting the European Code of Ethics for Franchising.


association inFormation (sFa)Not-for-profit organization created in 1998 in Ljubljana, Slovenia. Main category of membership: franchise and master franchise companies.

Number of members in 2012: 25 (50% franchise systems)

Sources of association income: membership fees (60%), conferences/seminars (10%), unpaid volunteer work (30%).

Composition of the Board of Directors: representatives of the head franchise companyChairman: Mrs. Barbara HUMAR GERBEC, LINEA SNELLA Co.d.o.oSecretary General: Mr. Igor PAVLIN

SFA assets: Very focused on educational programs for present and future franchisors and franchisees; involved in entrepreneurial programs for college-level students; organizes conferences & seminars on franchising; active with EU-subsidized projects; association housed at the Slovenian Chamber of Commerce (Trgovinska Zbornica Slovenije).

44 • EFF

Franchise marKet inFormation:Franchising was introduced in Spain in 1957 by the French brand RODIER.


Number of distinct franchise brands 850 875 919 934 947Number of franchised points of sale/business (not company-owned) 59.182 58.305 57.139 56.444 58.279Employment in the above points of sale/business (including self-employed) (estimated) 234.415 235.929 235.075 231.603 240.713Turnover for the above POS/business (in bn Euros) 29,0 29,7 26,8 26,3 27,8Proportion of domestic brands (in %) 81,2% 81,8% 81,3% 81% 81%

Average annual growth of franchise brands: 2007-2011: 10,1% Average annual growth of points of sale: 2007-2011: -1,5%Average annual growth of employment: 2007-2011: 14,0% Average annual growth of turnover: 2007-2011: 20,7%

Franchise sectors: according to the NACE Rev. 2 classification system. List the first 5 franchise sectors from largest in numbers of franchise systems to smallest. Section ID Division # NACE Rev. 2 categories 2011 - # brands/position

G 45 Retail/repair motor vehicles & motorcycles 3 (41 brands)

G 47 Retail trade except motor vehicles & motorcycles 1 (613 brands)

H 49 Transport & storage 9 (10 brands)

I 56 Food & Beverage service activities 2 (154 brands)

L 68 Real estate activities 7 (25 brands)

M 74 Other prof., scientif., tech., services 4 (28 brands)

N 79 Travel agencies 8 (20 brands)

P 85 education 5 (28 brands)

R 93 Arts, Entertainment, Recreation (Sports) 6 (28 brands)

947

NACE Rev. 2

# franchise brands/systems # franchised POS/outlets # employees in POS Turnover in POS (bn €)

2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 45 41 40 41 2.293 2.173 2.209 6.880 6.349 6.367 702,3 655,1 632,8

G 47 588 603 626 31.035 31.060 33.414 126.913 123.652 138.428 12.814,9 13.989,9 15.738,0

H 49 10 11 10 2.547 2.481 2.429 13.614 13.652 12.255 1.522,4 1.572,6 1.449,2

I 56 149 153 154 10.559 10.590 10.325 59.503 60.779 57.715 5.230,4 5.301,1 5.471,5

L 68 26 25 25 1.330 1.461 1.272 4.698 4.829 3.843 1.192,3 243,0 204,4

M 74 26 25 28 2.052 2.048 2.099 3.994 4.194 4.797 320,0 312,7 318,5

N 79 25 23 20 4.976 4.196 4.117 12.065 10.623 9.647 2.263,8 1.637,1 1.587,2

P 85 27 28 28 1.176 1.245 1.161 3.909 4.055 3.991 267,9 272,2 265,8

R 93 27 26 15 1.171 1.190 1.253 3.499 3.470 3.670 385,5 667,7 684,4

TOTAL 919 934 947 57.139 56.444 58.279 235.075 231.603 240.713 26,8 26,3 27,8

MeMber of:

spanish Franchising association asociación española de franquiciadores (aeF)www.franquiciadores.comwww.calidadenfranquicia.comwww.abogadosdefranquicia.com

spain is an eu member state since January 1, 1986.

currency: euro (E)

spain - Franchise review

EFF • 45

Where do domestic brands expand to (list 5 countries from most to least) ?Portugal, México, Andorra, France, Italy, UK, Saudi Arabia, UAE, Romania, Morrocco.

Where do foreign brands come from (list 5 countries from most to least) : France, United States, Italy, Portugal, UK.

FRANCE

PORTUGAL

MOROCCO ALGERIA

SPAIN

0 100 200 km

Madrid

AtlanticOcean

MediterraneanSea Modes of entry of foreign

franchises: (listed by order of preference from the following modes: direct franchising, subsidiary, area development, master franchising, joint venture)

1. master franchising, 2. area development, 3. direct franchising, 4. subsidiary, 5. joint venture.

Spanish Brands (5, by order of turnover):

DAY (food retail), FALCON Travel (travel agency), SPAR (food retail), MRW (courier), TELEPIZZA (food service) Self-Regulation: Reference: the European Code of Ethics for Franchising.

National Regulation: - Law 7/1996, de 15 de enero, de Ordenación del Comercio Minorista, Boletín Oficial del

Estado, 15 del 17 gennaio 1996: Regulates Retail Trading including franchising; requires disclosure obligations which targets trade and commercial enterprises and networks;

- Royal Decree N° 201/2010 of 26th February 2010: regulates the exercise of commercial franchising and requires that all franchises operating in Spain (foreign & national) register in a franchise registry.

(Note: this registration contribute to having very complete franchise statistics.)


association inFormation (aeF)Not-for-profit organization founded in 1993 in Valencia, Spain with offices in Madrid & Barcelona. Main categories of membership: franchise companies, master franchise companies, collaborating partners, institutional members & honorary members.

Number of franchise system members in 2012: 182 (70% franchisors)Sources of association income: membership fees (91%), sales 7%), grants (2%)

Composition of the Board of Directors: franchisorsChairman: Mr. Xavier VALLHONRAT LLURBA - Il Caffe di RomaCEO: Mr. Eduardo ABADÍA GONZÁLEZ

AEF assets: Actively involved in supporting the international development of their franchise members; AEF presence at many franchise fairs; publications, including excellent statistics (available on-line); Co-founder of FIAF.

46 • EFF

Franchise marKet inFormation:Franchising started in Sweden in 1932 with the Swedish brand Anticimex (pest control).



Number of franchised points of sale/business 10.000 15.000 18.000 24.000 26.000

Employment in the above POS/business (including self-employed) estimated 67.000 75.000 102.000 102.000 110.000


Proportion of domestic brands (in %) 90% 80% 80% 80%





I 56 Food & Beverage service activities Fast food

N 81 Services to buildings, landscaping, etc. Construction

M 70 Business & management consulting Consulting

H 49 Land and pipeline transport Transport

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

G 47 287 9.800 42.000 7,8

I 56 126 4.200 18.000 3,4

N 81 49 1.400 15.000 1,3

M 70 44 1.350 12.000 1,3

H 49 44 1.250 15.000 1,2

TOTAL 550 640 700 18.000 24.000 26.000 102.000 102.000 110.000 15,0 19,0 21,0

MeMber of:

swedish Franchise associationsvensk Franchise - svenska Franchiseföreningen

www.svenskfranchise.se

sweden is an eu member state since January 1, 1995.

currency: swedish Krona swK; 1 E ~ 8.4 swK

sweden - Franchise review

EFF • 47

Where do domestic brands expand to (list 5 countries from most to least) ?Denmark, Norway, Finland, Germany, Netherlands, US.

Where do foreign brands come from (list 5 countries from most to least) : US, UK, Denmark, Norway, Germany.


1. master franchising, 2. direct franchising, 3. Subsidiary, 4. area development, 5. joint venture.

Austrian Brands (5, by order of num-ber of franchised outlets):

Pressbyrån, Svenska Turistföreningen, Sibylla, TEAM SPORTIA, Electrolux

Self-Regulation: SF members commit to respecting the European Code of Ethics for Franchising; SF-defined Pre-contractual checklist of information that the franchisor must provide a prospective franchisee before signature of the contract; Quality Standard SF-defined Accreditation system for franchise and professional members.

National Regulation: Law on the Duty of a Franchisor to provide information (24 May 2006, Law N° 2006:484); governement-created Committee of Ethics reserved to SF members; decisions published on SF website.EU Legislation of relevance to Franchise contracts: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices.

association inFormation (sFv)Not-for-profit organization founded in 1972 in Gothenburg. Main categories of membership: franchisors, master franchises, franchisees, professionals.

Number of franchise system members & franchisees in 2012: 120 (80% franchisors)Composition of the Board of Directors: franchisors, franchisees, 1 professional

Sources of association income: membership fees (90%), events/sponsoring (10%)Chairman: Mr. Jonas IDESTRÖM, FranchiseArchitectManaging Director: Mr. Anders SVENSSON

SF/SFA assets: SF/SFA strongly promotes brands though SF "members-only" website, award schemes; media, annual franchise report, conferences focused on exchange of experience & good practice, publications.

V ä r n er

n

Vä t t e r n

SWEDEN

Gulf ofBothnia

Norwegian Sea

BalticSea

Stockholm

FINLAND

ESTONIA

LATVIA

LITUANIA

DEN.

NORWAY

0 50 100 km

48 • EFF

Franchise marKet inFormation:Franchising was introduced in Switzerland in the 70ies (through activities by university professors) but took off as a serious marketing strategy in the mid 90ies.

We do not have any serious market surveys, but rather estimates as regards the numbers of franchise brands in Switzerland. Our estimate lies between 250 – 300 brands associated with Franchising in Switzerland.


Number of distinct franchise brands (estimate) 250–300 250–300 250–300


No serious market surveys



Proportion of domestic brands (in %)

Average annual growth of franchise brands: Average annual growth of points of sale: Average annual growth of employment: Average annual growth of turnover:



NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

TOTAL

MeMber of:

swiss Franchise association schweizer Franchise verband (sFv)

www.franchiseverband.ch

switzerland is not a member state of the european union.

currency: swiss Franc: 1 E ~ 1.2 chF

switZerland - Franchise review

EFF • 49

Where do domestic brands expand to (list 5 countries from most to least) ?Germany, France & Italy due to the proximity of languages and culture (test markets), Asian markets, USA.

Where do foreign brands come from (list 5 countries from most to least) : US (fast foods), France, Germany, Italy (fashion).


1. master franchising, 2. direct franchising, 3. area development, 4. subsidiary, 5. joint venture.

Swiss Brands (principle ones):

Swatch, MONTREUX JAZZ CAFE, Lindt Chocolate, Tally Weijl, AMAVITA Apotheken, Valora, INTERSPORT, Kieser Training, oprandi & partner, ParaMediForm

Self-Regulation: SFV members commit to respect the European Code of Ethics for Franchising.

EU Legislation of relevance to Franchise contracts: Applicable when a Swiss franchisor expands into EU markets: EU REGULATION No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the EU to categories of vertical agreements and concerted practices,

association inFormation (sFv)Not-for-profit organization founded in the 70s. 2 offices: Zürich (German-speaking community), Morges (French-speaking community). Main categories of membership: franchisors, master franchises, professionals

Number of franchise system members in 2012: 43 franchisors, 11 sponsoring members.

Sources of association income 2011: membership fees (almost 100 %) and some banner advertisement on our website (members only).

Composition of the Board of Directors: franchisorsChairman: Mr. Theodor KEIFER, RE/MAX Switzerland Managing Director: Dr. Christoph WILDHABER

Bern

GERMANY

AUSTRIA

ITALY

FRANCE

0 50 100 km

SWITZERLAND

50 • EFF

Franchise marKet inFormation:Franchising started in Turkey in 1991 with the US brand McDonald’s.

In blue: referenced in the tables below 2007 2008 2009 2010 2011 2012

Number of distinct franchise brands 1669 1708




Proportion of domestic brands (in %) (average of categ. G-S) 73% 81%



Section ID Division # NACe rev. 2 categories# franchise brands/systems

2010 % domestic 2010 2011 % domestic

2011

G 47 Retail/repair motor vehicles & motorcycles 951 68% 956 68%

I 55,56 Accommodation & Food Service Activities 467 81% 493 81%

L 68 Real Estate activities 31 74% 33 74%

M 70,73,74 Professional, scientific & technical activities 72 69% 71 69%

N 77-82 Admin./business & support activities 16 94% 16 94%

P 85 Education 35 86% 35 86%

Q 86,87 Human health & social work activities 40 65% 41 66%

R 90,93 Arts, entertainment & recreation 29 93% 32 94%

S 94-96 Other service activities 28 31% 31 97%

TOTAL 1669 Av.=73% 1708 Av.=81%

turKish national Franchise association Franchise dernegi - uFrad

www.ufrad.org.tr

turkey is a candidate to membership of the european union.

currency: turkish lire (trY); 1 E ~ 2.21 trY

MeMber of:

turKeY - Franchise review

EFF • 51

Where do domestic brands expand to (list 5 countries from most to least) ?Germany, Saudi Arabia, Iraq, Azerbaijan, Netherlands.

Black SeaBULGARIA

TURKEY

GREECE

RUSSIA

GEORGIA

ARMENIA

IRAN

IRAQSYRIA

Ankara

0 50 100 km

Adriatic Sea

AUSTRIA

Mediterranean Sea CYPRUS

Where do foreign brands come from (list 5 countries from most to least) : USA, France, UK, Italy.


1. master franchising, 2. joint venture, 3. direct franchising, 4. subsidiary, 5. area development.

Turkish Brands (5 first ones):

SIMIT SARAYI, ÇI· LEK, ALTINBAS , ISTIKBAL, KOTON

Self-Regulation: UFRAD members commit to respect the EFF's European Code of Ethics for Franchising.

EU Legislation of relevance to Franchise contracts: no.

association inFormation (uFrad)Not-for-profit organization founded in 1991 in Istanbul.Main categories of membership: franchisors, master franchises, suppliers as supporting members

Sources of association income 2011: membership fees (60%), Exhibition (30%), Franchise Academy (10%)

Number of franchise system members in 2012: 98 (75 % franchise systems)

Composition of the Board of Directors: franchisorsChairman: Dr. Mustafa AYDIN, Bil Holding, Istanbul Aydın Üniversitesi, UFRAD Managing Director: Ms. Irem ARMAN

UFRAD assets: Very focused on education, Franchise Academy, media presence, government relations, international expansion, exhibition, TV Program and Quarterly Franchise Magazine;Note: Average annual growth of employment in franchising 2007-2011: 14%Comment: The government supports the employment of new graduates and university students which increases employment.

52 • EFF

Franchise marKet inFormation:Franchising started in the United Kingdom in the early 1960s, with Dyno-Rod, a domestic brand, and SERVICE MASTER, a master franchise from the USA.


Number of distinct franchise brands 809 838 845 900 929Number of franchised points of sale POS /business (not company-owned) 36.200 36.600 36.500 38.600 40.100

Employment in the above points of sale POS /business (including self-employed) (estimated) 480.000 467.000 465.000 521.000 594.000

Turnover for the above points of sale/business (in bn GBP) 12,4 11,4 11,8 12.4 13,4


Average annual growth of franchise brands: 2007-2011: 3,6% Average annual growth of points of sale: 2007-2011: 2,6%Average annual growth of employment: 2007-2011: 5,7% despite neg. growth in '08/'09Average annual growth of turnover: 2007-2011: 2,0%



N 82 Office /business support services

N 81 Services to buildings, landscapes



S 96 Other personal services

X Other (unspecified)

NACE Rev. 2


2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011

N 82 161 3.900

N 81 160 4.300

G 47 123 6.400

I 56 121 8.100

S 96 109 3.900

X 255 13.500

TOTAL 845 900 929 36.500 38.600 40.100 465.000 521.000 594.000 11,8 12,4 13,4

British Franchise association (thebfa)

www.thebfa.org

the uK is an eu member state since January 1, 1973.

currency: gBp ; 1 E ~ 0.78 gBp

MeMber of:

united Kingdom - Franchise review

EFF • 53

Where do domestic brands expand to (list 5 countries from most to least) ?About 250 UK brands export to Ireland, Scandinavia, the rest of Europe, North America & the Commonwealth.

Where do foreign brands come from (list 5 countries from most to least) : USA, Canada, Australia, New Zealand, Italy.

LUXEMBOURG

North Sea

IRELAND

FRANCE

0 50 100 km

UNITEDKINGDOM

London


1. master franchising, 2. subsidiary, 3. joint venture, 4. area development, 5. direct franchising.

UK Brands (5 first ones, not in order of size of network):

Clarks ™, COSTA Coffee, Thorntons, Dairy Crest, TONI&GUYSelf-Regulation: BFA members (all categories) commit to respect the European Code of Ethics for Franchising which is incorporated in the BFA's Code of Ethical Conduct which includes the BFA's Extensions & Interpretations of the European Code of Ethics.


association inFormation (BFa)Not-for-profit organization founded in 1977 in EnglandMain categories of membership: Franchisors (Full Membership, Associate Membership, Provisionally Listed Companies) Affiliated Members (franchise lawyers-consultants etc.), Franchisees (of Franchisor members only)

Number of franchise system members in 2012: 270 franchisors (plus 110 Affiliate professional advisors)

Composition of the Board of Directors: franchisors, professionals, franchiseesChairman: Mr. Mr. Michael EYRE, BLAZES Heating SolutionsDirector General: Mr. Brian SmartSources of association income 2011: membership fees (85%), marketing & events (10%), training (5%)

BFA assets: Membership accreditation system aimed at promoting proper & ethical franchising for all categories of members, including the professional affiliates; bfa website: informa-tion for all & recruitment tool for members; 2 Awards schemes; several bfa accredited franchise expos (London (2), Birmingham, Manchester); Mediation & Arbitration schemes; 4 major banks are BFA members; each have a dedicated franchise dept.; 70% of all franchisees and 75% of all franchisors bank with these 4 banks; Government guarantee scheme: EFG- Enterprise Finance Guarantee scheme open to franchising.

54 • EFF

EFF • 55

Part III Statistical insight into the economic share of franchising

Sources:For the EU: • 2012/4, EC/Eurostat-Business economy by sector NACE Rev. 2 • http://epp.eurostat.ec.europa.eu /statistics_explained/For franchising: the 21 national franchise associations of the countries represented

in this Report

56 • EFF

The 5 Tables that follow show figures for the Franchise industry in Europe by country. The numbers are provided by the national franchise associations of these countries. The tables allow country comparisons, but are not correlated with Eurostat figures. This will follow in Tables 6-11.

taBle 1.a: numBer oF distinct Franchise Brands/sYstems per countrY + average annual growth 2007-2011

Country# of distinct FRANCHISE BRANDS/Systems Average

annual growth2007 2008 2009 2010 2011 est.

1 AT-AUSTRIA 400 420 420 2,5%

2 BE-BELGIUM 100 200 320 360 350 4,8%

3 UK-BRITAIN 809 838 845 900 929 3,6%

4 HR-CROATIA 125 150 168 175 6,6%

5 CZ-CZECH Rep. 131 137 150 168 190 9,8%

6 DK-DENMARK 180 185 188 188 1,5%

7 FI-FINLAND 220 255 265 270 270 5,4%

8 FR-France 1.137 1.229 1.396 1.477 1.569 8,5%

9 DE-GERMANY 910 950 980 980 990 2,2%

10 EL-GREECE 563 450 456 -9,4%

11 HU-HUNGARY 330 350 350 361 361 2,3%

12 IT-ITALY 817 852 869 883 885 2,0%

13 NL-NETHERLANDS 676 687 692 714 739 2,3%

14 PL-POLAND 387 491 584 697 746 4,5%

15 PT-Portugal 501 521 524 570 578 4,5%

16 RS-SERBIA

17 SI-SLOVENIA 103 106 107 103 106 0,8%

18 ES-SPAIN 850 875 919 934 947 10,1%

19 SE-SWEDEN 350 400 550 640 700 19,4%

20 CH-SWITZ. 275 275 275 275

21 TR-TURKEY 1.669 1.708

7.901 8.751 9.539 11.952 12.582 4,5%

In the 21 countries of this survey, one can estimate at least 12.600 distinct franchise brands (rounded figure).

taBle 1.B: numBer oF Franchise Brands oF other maJor regions/countries oF the world, 08/2012

USA 3.000 Brazil 2.031 China 4.000 Australia 1.025 S. Africa 551

Canada 1.200 Mexico 1.100 Korea 2.400 Egypt 400

Argentina 300 India 1.800 Morocco 315

Philippines 1.300

Japan 1.233

EFF • 57

taBle 2: numBer oF Franchised points oF sale/enterprises + average annual growth 2007-2011

Note: the assumption for this table is that the majority of points of sale correspond to single-unit franchisees. This is a reality for much of franchising in Europe.

Country

# of FRANCHISED POINTS of SALE (enterprises)

Average annual growth2007 2008 2009 2010 2011 est.

1 AT-AUSTRIA 7.200 8.000 8.000 5,6%

2 BE-BELGIUM 3.500 11.000 54,0%

3 UK-BRITAIN 36.200 36.600 36.500 38.600 40.100 2,6%

4 HR-CROATIA 900 900 1.000 2,8%

5 CZ-CZECH Rep. 3.476 4.366

6 DK-DENMARK 7.500 7.500

7 FI-FINLAND 3.500 4.200 4.400 4.500 4.500 6,8%

8 FR-France 47.291 50.127 53.101 58.351 62.041 8,5%

9 DE-GERMANY 55.000 57.000 61.000 65.500 66.900 5,0%

10 EL-GREECE 11.650 12.796 12.048 12.084 11.113 -1,2%

11 HU-HUNGARY 17.000 18.000 19.000 20.000 20.000 4,2%

12 IT-ITALY 52.725 53.434 53.313 54.013 54.096 0,7%

13 NL-NETHERLANDS 28.219 28.466 29.021 29.509 29.781 1,4%

14 PL-POLAND 22.450 26.781 32.589 37.218 42.522 4,4%

15 PT-Portugal 11.271 12.206 13.000 12.016 11.760 2,4%

16 RS-SERBIA

17 SI-SLOVENIA 1.213 1.525 1.527 1.532 1.540 0,9%

18 ES-SPAIN 59.182 58.305 57.139 56.444 58.279 -1,5%

19 SE-SWEDEN 10.000 15.000 18.000 24.000 26.000 28,0%

20 CH-SWITZ.

21 TR-TURKEY

433.643 460.498 7,8%

est. 500.000

From this table, one can estimate the number of POS/franchised enterprises to be at least 500.000. The estimated total average annual growth rate of 7,8% is high considering the figures span the 2008-2011 crisis years.

58 • EFF

taBle 3: Franchise emploYment + average annual growth 2007-2011

CountryEMPLOYMENT (self and employees) Average

annual growth2007 2008 2009 2010 2011

1 AT-AUSTRIA 64.000 61.000 61.000 -2,3%

2 BE-BELGIUM 40.000 80.000 25,0%

3 UK-BRITAIN 480.000 467.000 465.000 521.000 594.000 5,7%

4 HR-CROATIA 15.974 16.500 16.000 0,0%

5 CZ-CZECH Rep. 30.000 30.000

6 DK-DENMARK 32.800 32.800

7 FI-FINLAND 35.700 43.000 45.000 46.000 46.000 6,8%

8 FR-France 315.715 330.991 327.773 330.991 1,9%

9 DE-GERMANY 441.000 450.000 459.000 463.000 496.000 7,5%

10 EL-GREECE

11 HU-HUNGARY 92.000 100.000 100.000 100.000 100.000 2,2%

12 IT-ITALY 182.908 182.215 180.525 186.408 188.222 0,8%

13 NL-NETHERLANDS 245.576 255.201 258.808 257.361 270.300 2,5%

14 PL-POLAND 157.000 187.500 212.000 259.000 301.000 4,5%

15 PT-Portugal 66.860 68.960 69.536 73.143 70.151 3,0%

16 RS-SERBIA

17 SI-SLOVENIA

18 ES-SPAIN 234.415 235.929 235.075 231.603 204.713 2,7%

19 SE-SWEDEN 67.000 75.000 102.000 102.000 110.000 14,0%

20 CH-SWITZ.

21 TR-TURKEY

2.374.148 2.459.796 2.454.717 2.379.815 2.931.177 5,3%

est. minimum 3.000.000

It is difficult to develop conclusions about the exact contribution of franchising to employment from this table, other than to say that a minimum estimate, which includes self employment + employees of franchised enterprise, is of the order of at least 3 million in these 21 countries.

EFF • 59

taBle 4: turnover + average annual growth 2007-2011

CountryTURNOVER of franchised POS Average

annual growth2007 2008 2009 2010 2011

1 AT-AUSTRIA 7,4 7,9 3,4%

2 BE-BELGIUM 8,0 15,3 22,8%

3 UK-BRITAIN 12,4 11,4 11,8 12,4 13,4 2,0%

4 HR-CROATIA 1,8

5 CZ-CZECH Rep.

6 DK-DENMARK

7 FI-FINLAND 43,0 50,0 50,0 51,0 54,5 6,3%

8 FR-France 42,0 45,0 47,7 47,9 49,2 5,2%

9 DE-GERMANY 41,0 47,0 44,0 55,0 64,4 0,1

10 EL-GREECE

11 HU-HUNGARY

12 IT-ITALY 18,2 21,4 21,8 22,2 22,3 9,7%

13 NL-NETHERLANDS 29,7 30,3 29,7 30,2 31,3 1,8%

14 PL-POLAND 18,2 20,4 22,7 24,5 25,7 9,1%

15 PT-Portugal 4,8 5,0 5,0 7,8 5,3 7,0%

16 RS-SERBIA

17 SI-SLOVENIA

18 ES-SPAIN 29,0 29,7 26,8 26,3 27,8 6,1%

19 SE-SWEDEN 10,0 13,0 15,0 19,0 21,0 20,7%

20 CH-SWITZ.

21 TR-TURKEY

taBle 5: proportion oF domestic Franchise Brands, in %

FR IT NL DK ES TR DE SE UK FI PL EL HU PT BE CZ SI AT HR RS CH

85 85 85 82 81 81 80 80 80 74 74 70 70 62 60 55 48 46 30 - -

Comment: high proportions of domestic brands are found in countries in which franchising has been long-established as well as in countries whose economies have rapidly modernized and grown in the last 25 years. In the Central & East European countries, the ratio of domestic/foreign is constantly increasing. A country like Austria, however, where franchising is long established, has by virtue of geographic and cultural proximity to Germany, the particularity of having a lesser % of national brands and a high % of German brands.

60 • EFF

taBle 6: economic sectors in which Franchising exists in thase 21 countries, classiFied according to eurostat's nace (rev. 2) economic sector classiFication sYstem

NACE REV.2 Codes

Section Div. Group Details of the Group Comments related to Franchising Countries where franchises are significant in this sector

G Wholesale & retail Trade; repair of motor vehicles and motorcycles - Divisions 45-47 - also referred to as "Distributive trades"

All retail in specialised or non-specialised stores, via stalls, markets, mail order,internet

France Greece Poland Spain

45 45.2 Maintenance & repair of motor vehicles Note: The EFF considers the sales of motor vehicles in Europe as coming under a concession contract and not a franchise contract. Hence, they do not fall under the statistics for franchising as, for example, in the US.

45.3 Sale of motor vehicle parts & accessories 47 RETAIL TRADE (except for motor vehicles & motorcycles) All 21 countriesH Transportation and storage 49 47.1-9 Land transport & transport via pipelines (incl. Freight by road & removal serv.) Netherl. Spain Sweden 52 Warehousing & support activites for transportation Netherl. Hungary 53 Postal & courrier activities (public & private activities) Netherl. ItalyI Accomodation & Food Service Activities 55 Accomodation Belgium Croatia France Germany Netherl. Poland Turkey 56 FOOD & BEVERAGE SERVICE ACTIVITIES Fast & slow food; mobile; catering; beverages; other

food service activitesAll 21 countries

J Information & Communication 58 Publishing activities Incl. book & software publishing Netherlands 63 Information services activities (data processing, web portals, news agencies Netherlands ItalyK Financial & Insurance activities 64 Financial service activities except insurance & pension funding Incl. credit granting Netherl. ItalyL 68 Real Estate activities Incl. real estate agencies, RE management Belgium Czech R. Finland Greece Italy Netherl.

Portugal Spain TurkeyM Professional, scientific & technical activities 69 Legal & accounting (bookkeeping, auditing, tax consultancy) Greece Netherl. 70 Activities of head offices, management consultancy activities, public relations,

business manangement Croatia Greece Netherl. Sweden Turkey

73 Advertising & market research, public opinion polling Netherl. Turkey 74 Other professional, scientific & technical activities Incl. photography, design, translation/interpretation Greece Netherl. Spain TurkeyN Administrative & support service activities

77 Rental & Leasing activities Incl. motor vehicles, videos Turkey78 Employpment activities Incl. placement ag., temporary employm. ag., HR, Nertherl.79 Travel agency, tour operator reservation service & related activities Belgium Czech R. France Italy Slovenia Spain Turkey81 Services to buildings & landscape activities All cleaning activities Britain Denmark Finland Poland Sweden Turkey82 Office administrative, office support & other business support activities Photocopying, organisation of conventions/trade shows,

other business support act. Austria Belium Britain Poland Turkey

P 85 85.4-6 Education Especially language, computing & educational support activities

Austria Croatia Denmark Greece Netherl. Spain Turkey

Q Human Health & Social Work activities86 Human Health activities Incl. medical, dental & other human health act? Croatia Greece Hungary Netherl. Sweden Turkey87 Residential care activities Incl. nursing, special needs, elderly, disabled,etc. Netherl. Turkey88 Social work activities without accomodation Incl. elderly, disabled, child-care, etc. Finland

R Arts, entertainment & recreation90 Creative, arts & entertainment activities Turkey93 Sports activities, amusement & recreational activities Incl. sports, fitness, amusement & recreation act. Denmark Finland Netherl. Slovenia Spain Turkey

S Other service activities94 94.1 & 94.9 Activities of membership organisations Greece Italy Netherl. Turkey95 Repair of computers & personal & household goods France Netherl. Turkey96 Other personal service activities Incl. Textiles/furs:washing & drycleaning, hairdressing,

beauty, funeral, physical well-beingBritain Czeck R. Denmark France Germany Greece Hungary Italy Netherl. Poland Slovenia Turkey

X Anything that does not fit under the above categories # of franchise brands in these sectors (est.) 12.600 # enterprises in these sectors (est.) 500.500 # employment in these sectors (est.) 3.300.000

EFF • 61

NACE REV.2 Codes

Section Div. Group Details of the Group Comments related to Franchising Countries where franchises are significant in this sector

G Wholesale & retail Trade; repair of motor vehicles and motorcycles - Divisions 45-47 - also referred to as "Distributive trades"

All retail in specialised or non-specialised stores, via stalls, markets, mail order,internet

France Greece Poland Spain

45 45.2 Maintenance & repair of motor vehicles Note: The EFF considers the sales of motor vehicles in Europe as coming under a concession contract and not a franchise contract. Hence, they do not fall under the statistics for franchising as, for example, in the US.

45.3 Sale of motor vehicle parts & accessories 47 RETAIL TRADE (except for motor vehicles & motorcycles) All 21 countriesH Transportation and storage 49 47.1-9 Land transport & transport via pipelines (incl. Freight by road & removal serv.) Netherl. Spain Sweden 52 Warehousing & support activites for transportation Netherl. Hungary 53 Postal & courrier activities (public & private activities) Netherl. ItalyI Accomodation & Food Service Activities 55 Accomodation Belgium Croatia France Germany Netherl. Poland Turkey 56 FOOD & BEVERAGE SERVICE ACTIVITIES Fast & slow food; mobile; catering; beverages; other

food service activitesAll 21 countries

J Information & Communication 58 Publishing activities Incl. book & software publishing Netherlands 63 Information services activities (data processing, web portals, news agencies Netherlands ItalyK Financial & Insurance activities 64 Financial service activities except insurance & pension funding Incl. credit granting Netherl. ItalyL 68 Real Estate activities Incl. real estate agencies, RE management Belgium Czech R. Finland Greece Italy Netherl.

Portugal Spain TurkeyM Professional, scientific & technical activities 69 Legal & accounting (bookkeeping, auditing, tax consultancy) Greece Netherl. 70 Activities of head offices, management consultancy activities, public relations,

business manangement Croatia Greece Netherl. Sweden Turkey

73 Advertising & market research, public opinion polling Netherl. Turkey 74 Other professional, scientific & technical activities Incl. photography, design, translation/interpretation Greece Netherl. Spain TurkeyN Administrative & support service activities

77 Rental & Leasing activities Incl. motor vehicles, videos Turkey78 Employpment activities Incl. placement ag., temporary employm. ag., HR, Nertherl.79 Travel agency, tour operator reservation service & related activities Belgium Czech R. France Italy Slovenia Spain Turkey81 Services to buildings & landscape activities All cleaning activities Britain Denmark Finland Poland Sweden Turkey82 Office administrative, office support & other business support activities Photocopying, organisation of conventions/trade shows,

other business support act. Austria Belium Britain Poland Turkey

P 85 85.4-6 Education Especially language, computing & educational support activities

Austria Croatia Denmark Greece Netherl. Spain Turkey

Q Human Health & Social Work activities86 Human Health activities Incl. medical, dental & other human health act? Croatia Greece Hungary Netherl. Sweden Turkey87 Residential care activities Incl. nursing, special needs, elderly, disabled,etc. Netherl. Turkey88 Social work activities without accomodation Incl. elderly, disabled, child-care, etc. Finland

R Arts, entertainment & recreation90 Creative, arts & entertainment activities Turkey93 Sports activities, amusement & recreational activities Incl. sports, fitness, amusement & recreation act. Denmark Finland Netherl. Slovenia Spain Turkey

S Other service activities94 94.1 & 94.9 Activities of membership organisations Greece Italy Netherl. Turkey95 Repair of computers & personal & household goods France Netherl. Turkey96 Other personal service activities Incl. Textiles/furs:washing & drycleaning, hairdressing,

beauty, funeral, physical well-beingBritain Czeck R. Denmark France Germany Greece Hungary Italy Netherl. Poland Slovenia Turkey

X Anything that does not fit under the above categories # of franchise brands in these sectors (est.) 12.600 # enterprises in these sectors (est.) 500.500 # employment in these sectors (est.) 3.300.000

Note: for a view of the full NACE (Rev. 2) Economic Sector classification system, go to http://epp.eurostat.ec.europa.eu/portal/page/portal/nace_rev2/introduction

62 • EFF

Tables 7-11 aim at showing the share of franchising in relation to statistics provided by Eurostat. source: http://epp.eurostat.ec.europa.eu /statistics_explained/

The objective is to show, in relation to the NACE (Rev. 2) Economic Sector classification system:

Â in which sectors franchised businesses are found

Â the share of franchising in terms of number of enterprises

The results are partial due to the lack of statistics from the franchise sources, as well as to the difficulties that lie in using some of the Eurostat data. For instance, Eurostat regroups a portion of the NACE economic sectors into a subgroup called "non financial business economy NFBE". This subgroup includes sectors in which franchising exists (i.e. Distributive Trades, Admin. & Support services, Transportation & storage, Accommodation & Food services, Real Estate), but excludes others. At the same time, Franchising is also found in Education (i.e. support activities), Human Health activities (i.e. non medical help for the elderly, young, etc.), and many Services, sectors in which franchised concepts are developing significantly. Correlating the figures between franchise data and Eurostat data is not possible in all instances.However, this Report does set out to make comparisons where meaning can be drawn.

taBle 7: three maJor nace* economic sectors in which Franchising exists in all 21 countries

NACE REV.2 Codes EU-27 EFF

Sections DivisionSection/Division/

Group

# enterprises %* employment %* EFF countries

in study

G 47 RETAIL TRADE (except motor veh.& ycles)

3,554,000 17.1% 18,542,000 13.8% All 21 countries

I 55/56 Accomod. & Food/Bev. Services

1,753,000 8,4% 9,949,000 7,4% All 21 countries

L 68 Real Estate activities

1,097,700 5,3% 2,600,000 1,9%

* These 3 sectors fall into the "non-financial business economy".

EFF • 63

taBle 8: retail - % oF Franchised enterprises in section g 47 / total # oF g 47 enterprises/ countrY

Section G 47 (Retail:"Distributive Trades")

Eurostat Franchised %

# enterprises

i ii ii/i

ES-Spain 498.000 33.233 6,7%FI-Finl. 22.800 82 0,4%NL-Neth. 77.900 16.068 20,6%PL-Pol. 319.000 30.651 9,6%SE-Swed. 58.500 4.200 7,2%UK 187.900 6.400 3,4%

Comment Section G 47: A high share of franchising is found in Retail & repair of motor vehicles/cycles. In Retail, e-commerce is increasing & forcing a shift in developmental strategy. The Distributive Trades are essentially local in nature with the consequence that in the EU, this sector has the highest share of number of enterprises and related employ-ment (in the "non-financial business economy", NFBE). For 2009, this share was respectively 29,1% (number of enterprises) & 24,9% (employment). Of this, 58,8% of the enterprises were in Retailing; 12,7% for the motor trades. In Retail, there is a high incidence of part-time employment.

taBle 9: accomodation & Food services - % oF Franchised enterprises in section i 55/56 / total # oF i 55/56 enterprises / countrY

Section I 55/56 (Accomod. & Food services)


# enterprises

i ii ii/i

ES-Spain 283.900 10.590 3,7%NL-Neth. 38.500 2.160 5,6%PL-Pol. 57.700 1.699 2,9%SE-Swed. 27.500 4.200 15,3%UK 129.100 8.100 6,3%

Comment Section I 55/56: A significant share of this sector is developed as franchising in the world.

64 • EFF

taBle 10: transports & storage - % oF Franchised enterprises in section h 49, 52, 53 / total # oF h 49, 52, 53 enterprises / countrY

Section H 49, 52, 53 (Transports & Storage)


# enterprises

i ii ii/i

ES-Spain 220.800 2.481 1,1%NL-Neth. 26.100 971 3,7%SE-Swed. 28.900 1.250 4,3%

taBle 11: real estate - % oF Franchised enterprises in section l 68 / total # oF l 68 enterprises / countrY

Section L 68 (Real Estate)


# enterprises

i ii ii/i

FI-Finl. 17.000 8 0,1%EL-Greece na 23 NL-Neth. 19.700 971 4,9%

Comment L 68:This Section does not include facilities management (see M). In 2009, in the EU-27's non-financial business economy, around 1/20 enterprises operated in this section, accounting for over 1 million enterprises. It is a capital-intensive sector with high levels of tangible investment. The largest subsector in L is 68, renting & operating of real estate, accounting for 60,1% of the total number of enterprises.

TheEuropeanFranchiseFederation(EFF),foundedin1972,isanot-for-profitprofessionalorganizationthatrepresentsthefranchiseindustryinEurope.IthasitsseatinBrussels.Itcur-rentlyhasasmembers20franchiseassociationsfrom169EUMemberStatesand410non-EUStates.Itsaimsaretopromote,protectandcontributetothedevelopmentoffranchisinginEuropeandtospeakwithonevoiceforfranchisingtoalllevelsofauthority.

www.eff-franchise.comContact:CarolChopra,ExecutiveDirector,[email protected]

List of EFF Members (update: October 2012)

Austria,AustrianFranchiseAssociation(ÖFV) [email protected]

Belgium,BelgianFranchiseFederation(FBF/BFF) [email protected]

Britain,BritishFranchiseAssociation(BFA) [email protected]

Croatia,CroatianFranchiseAssociation(FIP) [email protected]

Czech Republic,CzechFranchiseAssociation(CAF) [email protected]

Denmark,DanishFranchiseAssociation(DFA) [email protected]

Finland,FinnishFranchiseAssociation(FFA) [email protected]

France,FrenchFranchiseFederation(FFF) [email protected]

Germany,GermanFranchiseAssociation(DFV) [email protected]

Greece,GreekFranchiseAssociation(GFA) [email protected]

Hungary,HungarianFranchiseAssociation(MFSZ) [email protected]

Italy,ItalianFranchiseAssociation(AIF) [email protected]

Netherlands,NetherlandsFranchiseAssociation(NFV) [email protected]

Poland,PolishFranchiseAssociation(POF) [email protected]

Portugal,PortugueseFranchiseAssociation(APF) [email protected]

Serbia,SerbianFranchiseAssociation(SURF) [email protected]/www.franchiseserbia.rs

Slovenia,SlovenianFranchiseAssociation(SFA) [email protected]

Sweden,SwedishFranchiseAssociation(SF) [email protected]

Switzerland,SwissFranchiseAssociation(SFV) [email protected]

Turkey,TurkishFranchiseAssociation(UFRAD) [email protected]

9Austria,Belgium,CzechRep.,Denmark,Finland,France,Germany,Greece,Hungary,Italy,Netherlands,Poland,Portugal,Slovenia,Switzerland,UK

10Croatia,Serbia,Switzerland,Turkey

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EUROPEANFRANCHISEFEDERATIONAv.Louise,179/14•B–1050Brussels•BelgiumTel.32(0)25201607•Fax32(0)[email protected]•www.eff-franchise.com

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